Reviewing Celanese (CE) and Westlake Chemical Partners (WLKP)
Celanese (NYSE: CE) and Westlake Chemical Partners (NYSE:WLKP) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, valuation, earnings, analyst recommendations, profitability, institutional ownership and risk.
This table compares Celanese and Westlake Chemical Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Westlake Chemical Partners||3.80%||4.73%||2.86%|
This is a breakdown of current recommendations and price targets for Celanese and Westlake Chemical Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westlake Chemical Partners||0||1||2||0||2.67|
Celanese presently has a consensus price target of $107.85, suggesting a potential upside of 0.82%. Westlake Chemical Partners has a consensus price target of $27.75, suggesting a potential upside of 18.59%. Given Westlake Chemical Partners’ higher possible upside, analysts plainly believe Westlake Chemical Partners is more favorable than Celanese.
Volatility & Risk
Celanese has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Westlake Chemical Partners has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500.
Institutional & Insider Ownership
96.2% of Celanese shares are owned by institutional investors. Comparatively, 55.2% of Westlake Chemical Partners shares are owned by institutional investors. 0.4% of Celanese shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Celanese and Westlake Chemical Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Celanese||$5.39 billion||2.69||$900.00 million||$5.73||18.67|
|Westlake Chemical Partners||$986.74 million||0.64||$40.94 million||$1.62||14.44|
Celanese has higher revenue and earnings than Westlake Chemical Partners. Westlake Chemical Partners is trading at a lower price-to-earnings ratio than Celanese, indicating that it is currently the more affordable of the two stocks.
Celanese pays an annual dividend of $1.84 per share and has a dividend yield of 1.7%. Westlake Chemical Partners pays an annual dividend of $1.50 per share and has a dividend yield of 6.4%. Celanese pays out 32.1% of its earnings in the form of a dividend. Westlake Chemical Partners pays out 92.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Celanese has increased its dividend for 5 consecutive years and Westlake Chemical Partners has increased its dividend for 2 consecutive years.
Celanese beats Westlake Chemical Partners on 15 of the 17 factors compared between the two stocks.
Celanese Company Profile
Celanese Corporation (Celanese) is a technology and specialty materials company. The Company’s segments include Advanced Engineered Materials, Consumer Specialties, Industrial Specialties, Acetyl Intermediates and Other Activities. The Advanced Engineered Materials segment includes the Company’s engineered materials business and certain affiliates. The Consumer Specialties segment includes the Company’s cellulose derivatives and food ingredients businesses, which serve consumer-driven applications. The Industrial Specialties segment includes the Company’s emulsion polymers and ethylene vinyl acetate (EVA) polymers businesses. The Acetyl Intermediates segment includes the Company’s intermediate chemistry business, which produces and supplies acetyl products, including acetic acid, vinyl acetate monomer (VAM), acetic anhydride and acetate esters. The Company has operations in North America, Europe and Asia. As of December 31, 2016, the Company had 30 global production facilities.
Westlake Chemical Partners Company Profile
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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