Westlake Chemical (NYSE:WLK) versus The Competition Financial Analysis

Westlake Chemical (NYSE: WLK) is one of 33 publicly-traded companies in the “Commodity Chemicals” industry, but how does it weigh in compared to its rivals? We will compare Westlake Chemical to similar businesses based on the strength of its risk, profitability, earnings, dividends, institutional ownership, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings for Westlake Chemical and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westlake Chemical 0 2 9 0 2.82
Westlake Chemical Competitors 106 836 1229 36 2.54

Westlake Chemical currently has a consensus target price of $100.56, indicating a potential upside of 3.46%. As a group, “Commodity Chemicals” companies have a potential upside of 2.01%. Given Westlake Chemical’s stronger consensus rating and higher possible upside, equities analysts clearly believe Westlake Chemical is more favorable than its rivals.

Profitability

This table compares Westlake Chemical and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westlake Chemical 7.74% 15.59% 5.95%
Westlake Chemical Competitors -29.50% 24.34% 5.63%

Earnings and Valuation

This table compares Westlake Chemical and its rivals gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Westlake Chemical $5.08 billion $398.85 million 21.13
Westlake Chemical Competitors $4.01 billion $340.26 million 130.02

Westlake Chemical has higher revenue and earnings than its rivals. Westlake Chemical is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Dividends

Westlake Chemical pays an annual dividend of $0.84 per share and has a dividend yield of 0.9%. Westlake Chemical pays out 18.3% of its earnings in the form of a dividend. As a group, “Commodity Chemicals” companies pay a dividend yield of 1.8% and pay out 51.5% of their earnings in the form of a dividend. Westlake Chemical has increased its dividend for 13 consecutive years.

Insider and Institutional Ownership

30.4% of Westlake Chemical shares are held by institutional investors. Comparatively, 70.9% of shares of all “Commodity Chemicals” companies are held by institutional investors. 72.5% of Westlake Chemical shares are held by insiders. Comparatively, 7.8% of shares of all “Commodity Chemicals” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Westlake Chemical has a beta of 1.71, meaning that its share price is 71% more volatile than the S&P 500. Comparatively, Westlake Chemical’s rivals have a beta of 1.04, meaning that their average share price is 4% more volatile than the S&P 500.

Summary

Westlake Chemical beats its rivals on 10 of the 15 factors compared.

Westlake Chemical Company Profile

Westlake Chemical Corporation is a global manufacturer and marketer of basic chemicals, vinyls, polymers and building products. The Company’s products include a range of chemicals, which are fundamental to various consumer and industrial markets, including flexible and rigid packaging, automotive products, coatings, water treatment, refrigerants, residential and commercial construction, as well as other durable and non-durable goods. Its segments include Olefins and Vinyls. It manufactures ethylene (through Westlake Chemical OpCo LP (OpCo)), polyethylene, styrene and associated co-products at its manufacturing facility in Lake Charles and polyethylene at its Longview facility. The Company’s products in its Vinyls segment include polyvinyl chloride (PVC), vinyl chloride monomer (VCM), ethylene dichloride (EDC), chlor-alkali (chlorine and caustic soda) and chlorinated derivative products and, through OpCo, ethylene. It also manufactures and sells building products fabricated from PVC.

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