Westlake Chemical Partners (NYSE: WLKP) and Ashland Global Holdings (NYSE:ASH) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitabiliy and risk.
Volatility & Risk
Westlake Chemical Partners has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Ashland Global Holdings has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.
Westlake Chemical Partners pays an annual dividend of $1.42 per share and has a dividend yield of 6.0%. Ashland Global Holdings pays an annual dividend of $0.90 per share and has a dividend yield of 1.4%. Westlake Chemical Partners pays out 101.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ashland Global Holdings pays out -48.1% of its earnings in the form of a dividend. Westlake Chemical Partners has increased its dividend for 2 consecutive years and Ashland Global Holdings has increased its dividend for 7 consecutive years.
Valuation & Earnings
This table compares Westlake Chemical Partners and Ashland Global Holdings’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Westlake Chemical Partners||$1.01 billion||0.63||$439.46 million||$1.40||16.93|
|Ashland Global Holdings||$5.05 billion||0.82||$771.00 million||($1.87)||-35.52|
Ashland Global Holdings has higher revenue and earnings than Westlake Chemical Partners. Ashland Global Holdings is trading at a lower price-to-earnings ratio than Westlake Chemical Partners, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for Westlake Chemical Partners and Ashland Global Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westlake Chemical Partners||0||0||2||0||3.00|
|Ashland Global Holdings||0||2||2||0||2.50|
Westlake Chemical Partners presently has a consensus price target of $26.50, indicating a potential upside of 11.81%. Ashland Global Holdings has a consensus price target of $111.75, indicating a potential upside of 68.22%. Given Ashland Global Holdings’ higher possible upside, analysts plainly believe Ashland Global Holdings is more favorable than Westlake Chemical Partners.
This table compares Westlake Chemical Partners and Ashland Global Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Westlake Chemical Partners||3.82%||4.31%||2.49%|
|Ashland Global Holdings||-2.26%||13.53%||4.30%|
Institutional & Insider Ownership
79.6% of Westlake Chemical Partners shares are held by institutional investors. Comparatively, 89.3% of Ashland Global Holdings shares are held by institutional investors. 1.3% of Ashland Global Holdings shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Ashland Global Holdings beats Westlake Chemical Partners on 10 of the 16 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.
Ashland Global Holdings Company Profile
Ashland Inc. is engaged in specialty chemicals, and through Valvoline, is a consumer-branded lubricant supplier. The Company operates in three segments: Ashland Specialty Ingredients (Specialty Ingredients), Ashland Performance Materials (Performance Materials) and Valvoline. Its Specialty Ingredients segment is engaged in providing cellulose ethers, vinyl pyrrolidones and biofunctionals, and consists of two divisions: Consumer Specialties and Industrial Specialties. Its Performance Materials segment is engaged in providing unsaturated polyester resins and vinyl ester resins, and consists of two divisions: Composites and Intermediates/Solvents. Its Valvoline segment is engaged in producing and distributing automotive, commercial and industrial lubricants, and automotive chemicals. Its chemistry is used in various markets and applications, including architectural coatings, adhesives, automotive, construction, energy and pharmaceutical.
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