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This week, we use AAII’s A+ Investor Stock Grades to provide insight into three stocks in the chemical industry. With chemical companies facing significant headwinds in their supply chains and increased costs due to the Iran war, should you consider the stocks of Cabot Corp. (CBT), CF Industries Holdings Inc. (CF) and Ecovyst Inc. (ECVT)?

Chemical Stocks Recent News

The Iran war has upended the petrochemical industry’s expectations for 2026. As Alexander Tullo explains in recent Chemical & Engineering News articles, this year was expected to be one of surplus. With energy installations hit by drones and ships unable to move through the Persian Gulf, output is down. Analysts warn that it could take the rest of the year for business to return to normal. According to Tullo, over half of the global refineries have been impacted in some way, and an estimated 12% of global ethylene production has been affected—driving sharp price spikes across chemical markets. U.S. petrochemical production is in a position to ramp up if demand remains steady. 

As Tullo points out, U.S. companies have a cost advantage for making ethylene because they use ethane extracted from cheap local natural gas as a raw material. European and Asian regions make ethylene from naphtha derived from oil. Given these current conditions, might companies such as Cabot Corp., CF Industries and Ecovyst benefit?

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Grading Chemical Stocks With AAII’s A+ Stock Grades

When analyzing a company, it is helpful to have an objective framework that allows you to compare companies in the same way. This is why AAII created the A+ Stock Grades. They evaluate companies across five factors that research and real-world investment results indicate to identify market-beating stocks in the long run: value, growth, momentum, earnings estimate revisions (and surprises) and quality.

Using AAII’s A+ Stock Grades, the following table summarizes the attractiveness of three chemical stocks—Cabot Corp., CF Industries and Ecovyst—based on their fundamentals.

AAII’s A+ Stock Grade Summary for Three Chemical Stocks

What the A+ Stock Grades Reveal

Cabot Corp. (CBT) is a global specialty chemicals and performance materials company operating in the U.S., Europe, Asia Pacific and beyond. It offers specialty fluids, activated carbons and reinforcing materials for automotive, industrial, energy and consumer markets. The company operates in two segments: reinforcement materials and performance chemicals. Cabot Corp. produces a broad range of specialty chemicals and materials, including carbon black, fumed silica, activated carbon and cesium formate fluids. It also provides specialty compounds, inkjet colorants and battery materials, serving applications in tires, coatings, plastics, electronics and energy storage. The company was founded in 1882 and is headquartered in Boston, Massachusetts.

The company has a Value Grade of B, based on its Value Score of 75, which is good value. The Value Grade is the percentile rank of the average of the percentile ranks of the price-to-sales (P/S) ratio, price-earnings (P/E) ratio, price-to-book-value (P/B) ratio, price-to-free-cash-flow (P/FCF) ratio, shareholder yield and the ratio of enterprise value to earnings before interest, taxes, depreciation and amortization (EBITDA).

A lower rank on valuation metrics is more attractive. Among all U.S.-listed stocks, Cabot Corp. ranks in the 12th percentile for shareholder yield, in the 40th percentile for the price-earnings ratio and in the 37th percentile for the price-to-sales ratio. The company has a shareholder yield of 5.8%, a price-earnings ratio of 16.0 and a price-to-sales ratio of 1.25. It also has a price-to-free-cash-flow ratio of 13.3, ranking in the 35th percentile.

Earnings estimate revisions indicate how analysts view a firm’s short-term prospects. Cabot Corp. has an Earnings Estimate Revisions Grade of B, based on a score of 65, which is positive. The grade is based on the statistical significance of its latest two quarterly earnings surprises and the percentage change in its consensus estimate for the current fiscal year over the past month and past three months. Cabot Corp. reported a positive earnings surprise of 9.8% for its fiscal second-quarter 2026 ended March 31, and in the prior quarter reported a positive earnings surprise of 10.8%. Over the last month, the consensus earnings estimate for its fiscal third quarter of 2026 has decreased from $1.661 to $1.624 per share based on one downward revision. Over the last month, the consensus earnings estimate for fiscal-year 2026 has increased from $6.230 to $6.259 per share based on one upward revision. 

Cabot Corp. has a Quality Grade of A, with a score of 92, which is very strong. Higher-quality stocks possesses traits associated with upside potential and reduced downside risk. The Quality Grade is the percentile rank of the average of the percentile ranks of return on assets (ROA), return on invested capital (ROIC), gross profit to assets, buyback yield, change in total liabilities to assets, accruals to assets, Z double prime bankruptcy risk (Z) score and F-Score. To be assigned a Quality Score, stocks must have a valid (non-null) measure and corresponding ranking for at least four of the eight quality measures.

Cabot Corp. ranks strongly in terms of its buyback yield and return on assets. The company has a buyback yield of 3.7% and a return on assets of 7.4%. Additionally, its gross income to assets and return on invested capital are above the respective sector medians.

CF Industries Holdings Inc. (CF) is a leading nitrogen manufacturing and distribution company operating in the U.S., Canada, the U.K. and beyond. It offers nitrogen-based fertilizers and other nitrogen products for agricultural and industrial markets. The company operates through its network of manufacturing complexes and distribution facilities, with its primary products used in crop nutrition and industrial applications. CF Industries produces a broad range of nitrogen products, including ammonia, urea, urea ammonium nitrate, ammonium nitrate and diesel exhaust fluid. It also provides green and low-carbon ammonia solutions, positioning itself at the forefront of the clean energy transition through hydrogen and ammonia production initiatives. The company was founded in 1946 and is headquartered in Northbrook, Illinois.

CF Industries has a Quality Grade of A, with a score of 96, which is very strong. The company has a strong buyback yield of 8.5%. It also ranks strongly in terms of its return on assets (91st percentile) and F-Score (94th percentile). The F-Score is a number between 0 and 9 that assesses the strength of a company’s financial position based on its profitability, leverage, liquidity and operating efficiency.

CF Industries has a Momentum Grade of A, based on its Momentum Score of 81. This means that the stock’s momentum is very strong in terms of its weighted relative strength over the last four quarters. The weighted four-quarter relative strength rank is the relative price change for each of the past four quarters, with the most recent quarterly price change given a weight of 40% and each of the three previous quarters given a weight of 20%. The ranks are 88, 70, 50 and 37, sequentially from the most recent quarter. The weighted four-quarter relative price strength is 10.2%.

The company has a Value Grade of B, based on its Value Score of 72, which is good value. Its enterprise-value-to-EBITDA ratio is 5.7 and its shareholder yield is 10.0%, ranking in the 13th and 5th percentiles, respectively. Its price-to-free-cash-flow ratio is also attractive at 15.9.

CF Industries has a Growth Grade of B, which is strong. The company has generated positive annual cash from operations in the past five consecutive years and has a strong five-year annual sales growth rate of 11.4%.

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Ecovyst Inc. (ECVT) is a specialty chemicals and catalyst solutions company operating in the U.S., Europe and beyond. It offers catalyst technologies and sulfuric acid services for refining, chemical and industrial markets. The company operates in two segments: ecoservices and catalyst technologies. Ecovyst produces and regenerates sulfuric acid used in petroleum refining and industrial processes, and it manufactures specialty catalysts for polyolefin production and hydrocracking applications. It also provides zeolyst catalysts through its joint venture with Shell PLC (SHEL), serving customers in clean fuels, petrochemicals and emissions control. The company was founded in 2021 and is headquartered in Berwyn, Pennsylvania.

Ecovyst has a Quality Grade of B, with a score of 73, which is strong. The company ranks strongly in terms of its buyback yield and change in total liabilities to assets. Its buyback yield of 5.6% ranks in the 92nd percentile, and its change in total liabilities to assets of –33.4% ranks in the 96th percentile.

The company has a Momentum Grade of A, based on its Momentum Score of 85. This means that the stock’s momentum is very strong in terms of its weighted relative price strength over the last four quarters. The ranks are 84, 88, 46 and 75, sequentially from the most recent quarter. The weighted four-quarter relative price strength is 13.7%.

The company has a Value Grade of C, based on its Value Score of 44, which is average. Its price-earnings ratio of 84.8 is high compared to the sector median of 22.8.

Ecovyst has a Growth Grade of A, which is very strong. The company has generated positive annual cash from operations in the past five consecutive years and has a five-year annualized sales growth rate of 7.8%.