Analyzing Westlake Chemical Partners (WLKP) & Albemarle Corporation (ALB)

Westlake Chemical Partners (NYSE: WLKP) and Albemarle Corporation (NYSE:ALB) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, profitability, risk, earnings, analyst recommendations and valuation.

Dividends

Westlake Chemical Partners pays an annual dividend of $1.46 per share and has a dividend yield of 6.5%. Albemarle Corporation pays an annual dividend of $1.28 per share and has a dividend yield of 0.9%. Westlake Chemical Partners pays out 102.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Albemarle Corporation pays out 16.4% of its earnings in the form of a dividend. Westlake Chemical Partners has raised its dividend for 2 consecutive years and Albemarle Corporation has raised its dividend for 13 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Westlake Chemical Partners and Albemarle Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westlake Chemical Partners 0 0 2 0 3.00
Albemarle Corporation 0 6 11 0 2.65

Westlake Chemical Partners presently has a consensus price target of $26.50, suggesting a potential upside of 18.57%. Albemarle Corporation has a consensus price target of $118.53, suggesting a potential downside of 14.69%. Given Westlake Chemical Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Westlake Chemical Partners is more favorable than Albemarle Corporation.

Profitability

This table compares Westlake Chemical Partners and Albemarle Corporation’s 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%
Albemarle Corporation 31.49% 11.59% 5.42%

Valuation & Earnings

This table compares Westlake Chemical Partners and Albemarle Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Westlake Chemical Partners $1.09 billion 0.55 $456.12 million $1.42 15.74
Albemarle Corporation $2.81 billion 5.46 $744.58 million $7.80 17.81

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

Insider and Institutional Ownership

73.3% of Westlake Chemical Partners shares are held by institutional investors. Comparatively, 83.8% of Albemarle Corporation shares are held by institutional investors. 0.7% of Albemarle Corporation shares are held 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.

Volatility & Risk

Westlake Chemical Partners has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, Albemarle Corporation has a beta of 1.67, meaning that its share price is 67% more volatile than the S&P 500.

Summary

Albemarle Corporation beats Westlake Chemical Partners on 14 of the 17 factors compared between the two stocks.

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.

Albemarle Corporation Company Profile

Albemarle Corporation is a global developer, manufacturer and marketer of highly-engineered specialty chemicals. The Company operates through three segments: Lithium and Advanced Materials, Bromine Specialties and Refining Solutions. Lithium and Advanced Materials segment consist of two product categories: Lithium and Performance Catalyst Solutions. The bromine and bromine-based business includes products used in fire safety solutions and other specialty chemicals applications. The Company serves various end markets, including petroleum refining, consumer electronics, energy storage, construction, automotive, lubricants, pharmaceuticals, crop protection, food safety and custom chemistry services. As of December 31, 2016, the Company and its joint ventures operated 31 production and research and development (R&D) facilities, as well as a number of administrative and sales offices, around the world.

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