Contrasting NewMarket Corporation (NEU) & Westlake Chemical Partners (WLKP)
NewMarket Corporation (NYSE: NEU) and Westlake Chemical Partners (NYSE:WLKP) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.
Insider & Institutional Ownership
56.6% of NewMarket Corporation shares are held by institutional investors. Comparatively, 79.3% of Westlake Chemical Partners shares are held by institutional investors. 16.8% of NewMarket Corporation shares are held 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.
This table compares NewMarket Corporation and Westlake Chemical Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Westlake Chemical Partners||3.60%||4.34%||2.54%|
Earnings and Valuation
This table compares NewMarket Corporation and Westlake Chemical Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NewMarket Corporation||$2.11 billion||2.37||$402.53 million||$20.57||20.51|
|Westlake Chemical Partners||$1.09 billion||0.60||$456.12 million||$1.42||17.11|
Westlake Chemical Partners has higher revenue, but lower earnings than NewMarket Corporation. Westlake Chemical Partners is trading at a lower price-to-earnings ratio than NewMarket Corporation, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for NewMarket Corporation and Westlake Chemical Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westlake Chemical Partners||0||0||2||0||3.00|
Westlake Chemical Partners has a consensus price target of $26.50, indicating a potential upside of 9.05%. Given Westlake Chemical Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Westlake Chemical Partners is more favorable than NewMarket Corporation.
Risk & Volatility
NewMarket Corporation has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Westlake Chemical Partners has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.
NewMarket Corporation pays an annual dividend of $7.00 per share and has a dividend yield of 1.7%. Westlake Chemical Partners pays an annual dividend of $1.42 per share and has a dividend yield of 5.8%. NewMarket Corporation pays out 34.0% of its earnings in the form of a dividend. Westlake Chemical Partners pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NewMarket Corporation has increased its dividend for 8 consecutive years and Westlake Chemical Partners has increased its dividend for 2 consecutive years.
NewMarket Corporation beats Westlake Chemical Partners on 10 of the 17 factors compared between the two stocks.
About NewMarket Corporation
NewMarket Corporation is a holding company. The Company is the parent company of Afton Chemical Corporation (Afton), Ethyl Corporation (Ethyl), NewMarket Services Corporation (NewMarket Services), and NewMarket Development Corporation (NewMarket Development). The Company operates through petroleum additives segment, which is primarily represented by Afton. The Company manufactures chemical components that are selected to perform one or more specific functions and combine those chemicals with other chemicals or components to form additive packages for use in specified end user applications. The petroleum additives product applications include lubricant additives and fuel additives. The Company’s All other category includes the operations of the TEL business, as well as contract manufacturing and services performed by Ethyl. The Ethyl plant facility is located in Houston, Texas. It is involved in terminal operations related to TEL and other fuel additives.
About Westlake Chemical Partners
Westlake Chemical Partners LP is a limited partnership formed by Westlake Chemical Corporation (Westlake). The Company operates, acquires and develops ethylene production facilities and other assets. Its business and operations are conducted through Westlake Chemical OpCo LP (OpCo). OpCo sells ethylene to Westlake and others, as well as sells co-products of ethylene production, including propylene, crude butadiene, pyrolysis gasoline and hydrogen. As of December 31, 2016, OpCo’s assets included three ethylene production facilities, which primarily convert ethane into ethylene, and a 200-mile ethylene pipeline. As of December 31, 2016, OpCo owned two ethylene production facilities at Westlake’s Lake Charles, Louisiana site (Petro 1 and Petro 2, collectively Lake Charles Olefins), and one ethylene production facility at Westlake’s Calvert City, Kentucky site (Calvert City Olefins), with an annual capacity of approximately 630 million pounds.
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