Financial Contrast: Pacific Ethanol (PEIX) and Westlake Chemical (WLK)

Pacific Ethanol (NASDAQ: PEIX) and Westlake Chemical (NYSE:WLK) are both oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, institutional ownership, dividends and earnings.

Earnings & Valuation

This table compares Pacific Ethanol and Westlake Chemical’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pacific Ethanol $1.63 billion 0.08 -$34.96 million ($0.85) -3.53
Westlake Chemical $8.04 billion 1.90 $1.30 billion $5.47 21.51

Westlake Chemical has higher revenue and earnings than Pacific Ethanol. Pacific Ethanol is trading at a lower price-to-earnings ratio than Westlake Chemical, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Pacific Ethanol has a beta of 2.03, indicating that its stock price is 103% more volatile than the S&P 500. Comparatively, Westlake Chemical has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

Dividends

Westlake Chemical pays an annual dividend of $0.84 per share and has a dividend yield of 0.7%. Pacific Ethanol does not pay a dividend. Westlake Chemical pays out 15.4% of its earnings in the form of a dividend. Westlake Chemical has increased its dividend for 14 consecutive years.

Institutional and Insider Ownership

78.7% of Pacific Ethanol shares are owned by institutional investors. Comparatively, 30.1% of Westlake Chemical shares are owned by institutional investors. 3.9% of Pacific Ethanol shares are owned by company insiders. Comparatively, 72.0% of Westlake Chemical shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Pacific Ethanol and Westlake Chemical, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pacific Ethanol 0 0 3 0 3.00
Westlake Chemical 2 6 9 0 2.41

Pacific Ethanol presently has a consensus target price of $11.33, indicating a potential upside of 277.78%. Westlake Chemical has a consensus target price of $117.93, indicating a potential upside of 0.22%. Given Pacific Ethanol’s stronger consensus rating and higher probable upside, analysts plainly believe Pacific Ethanol is more favorable than Westlake Chemical.

Profitability

This table compares Pacific Ethanol and Westlake Chemical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pacific Ethanol -1.83% -7.78% -4.22%
Westlake Chemical 17.61% 17.77% 7.67%

Summary

Westlake Chemical beats Pacific Ethanol on 12 of the 17 factors compared between the two stocks.

About Pacific Ethanol

Pacific Ethanol, Inc. produces and markets low-carbon renewable fuels in the United States. The company operates in two segments, Production and Marketing. It produces and markets ethanol; specialty alcohols; and co-products, such as wet distillers grains, dry distillers grains with solubles, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, corn oil, distillers yeast, and CO2, as well as markets ethanol produced by third parties. The company also offers ethanol transportation, storage, and delivery services through third-party service providers. It sells ethanol to integrated oil companies and gasoline marketers; distillers grains and other feed co-products to dairies and feedlots; and corn oil to poultry and biodiesel customers. The company owns and operates nine ethanol production facilities in the Western states of California, Oregon, and Idaho; and in the Midwestern states of Illinois and Nebraska. Pacific Ethanol, Inc. was founded in 2003 and is headquartered in Sacramento, California.

About Westlake Chemical

Westlake Chemical Corporation manufactures and markets basic chemicals, vinyls, polymers, and building products primarily in North America and Europe. It operates through two segments, Olefins and Vinyls. The Olefins segment offers polyethylene, styrene monomers, and various ethylene co-products, as well as sells propylene, crude butadiene, pyrolysis gasoline, and hydrogen products. The Vinyls segment provides specialty and commodity polyvinyl chloride (PVC), vinyl chloride monomers, ethylene dichloride, chlorine, caustic soda, chlorinated derivative, and ethylene products. This segment also manufactures and sells building products fabricated from PVC, including pipe, fittings, profiles, trims, moldings, fence and decking products, window and door components, and film and sheet products. Westlake Chemical Corporation offers its products to a range of customers, including chemical processors, plastics fabricators, small construction contractors, municipalities, and supply warehouses in various consumer and industrial markets, such as flexible and rigid packaging, automotive products, coatings, water treatment, refrigerants, residential and commercial construction, as well as other durable and non-durable goods. The company was founded in 1985 and is headquartered in Houston, Texas. Westlake Chemical Corporation is a subsidiary of TTWF LP.

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