Westlake Chemical Partners (NYSE: WLKP) and Compass Minerals International (NYSE:CMP) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.
This table compares Westlake Chemical Partners and Compass Minerals International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Westlake Chemical Partners||4.15%||5.13%||3.18%|
|Compass Minerals International||3.13%||13.02%||3.87%|
This table compares Westlake Chemical Partners and Compass Minerals International’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Westlake Chemical Partners||$1.17 billion||0.62||$48.67 million||$1.64||13.84|
|Compass Minerals International||$1.36 billion||1.50||$42.70 million||$1.25||48.36|
Westlake Chemical Partners has higher earnings, but lower revenue than Compass Minerals International. Westlake Chemical Partners is trading at a lower price-to-earnings ratio than Compass Minerals International, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Westlake Chemical Partners has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500. Comparatively, Compass Minerals International has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.
This is a summary of recent ratings for Westlake Chemical Partners and Compass Minerals International, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westlake Chemical Partners||0||3||3||0||2.50|
|Compass Minerals International||1||1||3||0||2.40|
Westlake Chemical Partners presently has a consensus price target of $26.88, indicating a potential upside of 18.39%. Compass Minerals International has a consensus price target of $71.00, indicating a potential upside of 17.45%. Given Westlake Chemical Partners’ stronger consensus rating and higher probable upside, research analysts clearly believe Westlake Chemical Partners is more favorable than Compass Minerals International.
Westlake Chemical Partners pays an annual dividend of $1.55 per share and has a dividend yield of 6.8%. Compass Minerals International pays an annual dividend of $2.88 per share and has a dividend yield of 4.8%. Westlake Chemical Partners pays out 94.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Compass Minerals International pays out 230.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Westlake Chemical Partners has raised its dividend for 3 consecutive years and Compass Minerals International has raised its dividend for 14 consecutive years. Westlake Chemical Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
48.0% of Westlake Chemical Partners shares are owned by institutional investors. 0.8% of Compass Minerals International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Westlake Chemical Partners beats Compass Minerals International on 9 of the 16 factors compared between the two stocks.
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.
About Compass Minerals International
Compass Minerals International, Inc. (CMI) is a provider of essential minerals that solve nature’s challenges, including salt for winter roadway safety and other consumer, industrial and agricultural uses; specialty plant nutrition minerals for the quality and yield of crops, and specialty chemicals for water treatment and other industrial processes. The Company has three segments: Salt, Plant Nutrition North America and Plant Nutrition South America. The Salt segment produces and markets salt and magnesium chloride for use in road deicing and dust control, food processing, water softeners, and agricultural and industrial applications. Its Plant Nutrition North America segment includes sales of sulfate of potash (SOP) specialty fertilizer and micronutrients. The Plant Nutrition South America segment operates two primary businesses in Brazil: agricultural productivity and chemical solutions.
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