Reviewing Westlake Chemical Corporation (WLK) and Air Products & Chemicals (APD)
Westlake Chemical Corporation (NYSE: WLK) and Air Products & Chemicals (NYSE:APD) are both mid-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.
Earnings and Valuation
This table compares Westlake Chemical Corporation and Air Products & Chemicals’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Westlake Chemical Corporation||$6.94 billion||1.43||$1.33 billion||$3.50||21.99|
|Air Products & Chemicals||$9.95 billion||3.16||$3.18 billion||$13.33||10.83|
Air Products & Chemicals has higher revenue and earnings than Westlake Chemical Corporation. Air Products & Chemicals is trading at a lower price-to-earnings ratio than Westlake Chemical Corporation, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Westlake Chemical Corporation has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500. Comparatively, Air Products & Chemicals has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.
Institutional and Insider Ownership
32.0% of Westlake Chemical Corporation shares are held by institutional investors. Comparatively, 88.1% of Air Products & Chemicals shares are held by institutional investors. 71.7% of Westlake Chemical Corporation shares are held by insiders. Comparatively, 0.4% of Air Products & Chemicals shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This table compares Westlake Chemical Corporation and Air Products & Chemicals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Westlake Chemical Corporation||6.57%||13.68%||5.03%|
|Air Products & Chemicals||5.01%||4.46%||2.39%|
This is a summary of recent ratings and recommmendations for Westlake Chemical Corporation and Air Products & Chemicals, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westlake Chemical Corporation||0||3||7||0||2.70|
|Air Products & Chemicals||1||6||5||0||2.33|
Westlake Chemical Corporation currently has a consensus target price of $68.38, suggesting a potential downside of 11.18%. Air Products & Chemicals has a consensus target price of $153.33, suggesting a potential upside of 6.21%. Given Air Products & Chemicals’ higher probable upside, analysts clearly believe Air Products & Chemicals is more favorable than Westlake Chemical Corporation.
Westlake Chemical Corporation pays an annual dividend of $0.84 per share and has a dividend yield of 1.1%. Air Products & Chemicals pays an annual dividend of $3.80 per share and has a dividend yield of 2.6%. Westlake Chemical Corporation pays out 24.0% of its earnings in the form of a dividend. Air Products & Chemicals pays out 28.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Westlake Chemical Corporation has increased its dividend for 34 consecutive years and Air Products & Chemicals has increased its dividend for 13 consecutive years.
Westlake Chemical Corporation beats Air Products & Chemicals on 10 of the 17 factors compared between the two stocks.
About Westlake Chemical Corporation
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.
About Air Products & Chemicals
Air Products and Chemicals, Inc., is an industrial gases company. The Company’s Industrial Gases business provides atmospheric and process gases and related equipment to manufacturing markets, including refining and petrochemical, metals, electronics, and food and beverage. The Company is also a supplier of liquefied natural gas process technology and equipment. The Company operates through five segments: Industrial Gases-Americas, Industrial Gases-Europe, Middle East, and Africa (EMEA), Industrial Gases-Asia, Industrial Gases-Global, and Corporate and other.
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