Reviewing Westlake Chemical (WLK) and REX American Resources (REX)

Westlake Chemical (NYSE: WLK) and REX American Resources (NYSE:REX) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Westlake Chemical and REX American Resources, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westlake Chemical 2 7 9 0 2.39
REX American Resources 0 0 0 0 N/A

Westlake Chemical presently has a consensus target price of $119.94, suggesting a potential upside of 11.44%. Given Westlake Chemical’s higher possible upside, analysts plainly believe Westlake Chemical is more favorable than REX American Resources.

Earnings & Valuation

This table compares Westlake Chemical and REX American Resources’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Westlake Chemical $8.04 billion 1.73 $1.30 billion $5.47 19.68
REX American Resources $452.59 million 1.15 $39.70 million N/A N/A

Westlake Chemical has higher revenue and earnings than REX American Resources.

Dividends

Westlake Chemical pays an annual dividend of $0.84 per share and has a dividend yield of 0.8%. REX American Resources does not pay a dividend. Westlake Chemical pays out 15.4% of its earnings in the form of a dividend. Westlake Chemical has raised its dividend for 14 consecutive years.

Risk & Volatility

Westlake Chemical has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Comparatively, REX American Resources has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500.

Profitability

This table compares Westlake Chemical and REX American Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westlake Chemical 17.61% 17.77% 7.67%
REX American Resources 9.70% 7.22% 6.41%

Institutional and Insider Ownership

29.7% of Westlake Chemical shares are owned by institutional investors. Comparatively, 88.7% of REX American Resources shares are owned by institutional investors. 72.0% of Westlake Chemical shares are owned by company insiders. Comparatively, 12.5% of REX American Resources shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Westlake Chemical beats REX American Resources on 13 of the 15 factors compared between the two stocks.

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.

About REX American Resources

REX American Resources Corporation, together with its subsidiaries, produces and sells ethanol. It operates through two segments, Ethanol and By-Products, and Refined Coal. The company also offers dried distillers grains, modified distillers grains, and non-food grade corn oil. In addition, it provides dry distillers grains with solubles, which is used as a protein in animal feed; and produces, processes, and sells refined coal. The company was formerly known as REX Stores Corporation and changed its name to REX American Resources Corporation in 2010. REX American Resources Corporation was founded in 1980 and is headquartered in Dayton, Ohio.

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