Contrasting Westlake Chemical Corporation (WLK) & Methanex Corporation (MEOH)
Westlake Chemical Corporation (NYSE: WLK) and Methanex Corporation (NASDAQ:MEOH) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.
Earnings & Valuation
This table compares Westlake Chemical Corporation and Methanex Corporation’s 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||1.32||$1.33 billion||$3.50||20.29|
|Methanex Corporation||$2.58 billion||1.47||$572.88 million||$2.51||17.59|
Westlake Chemical Corporation has higher revenue and earnings than Methanex Corporation. Methanex Corporation 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.
This table compares Westlake Chemical Corporation and Methanex Corporation’s 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%|
Westlake Chemical Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 1.1%. Methanex Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. Westlake Chemical Corporation pays out 21.7% of its earnings in the form of a dividend. Methanex Corporation pays out 47.8% 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. Methanex Corporation has increased its dividend for 13 consecutive years. Methanex Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
30.1% of Westlake Chemical Corporation shares are held by institutional investors. Comparatively, 83.9% of Methanex Corporation shares are held by institutional investors. 71.7% of Westlake Chemical Corporation shares are held by insiders. Comparatively, 1.0% of Methanex Corporation 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.
Volatility & Risk
Westlake Chemical Corporation has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, Methanex Corporation has a beta of 1.78, indicating that its stock price is 78% more volatile than the S&P 500.
This is a breakdown of recent recommendations for Westlake Chemical Corporation and Methanex Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westlake Chemical Corporation||0||3||6||0||2.67|
Westlake Chemical Corporation currently has a consensus target price of $64.71, indicating a potential downside of 8.89%. Methanex Corporation has a consensus target price of $58.31, indicating a potential upside of 32.07%. Given Methanex Corporation’s higher possible upside, analysts plainly believe Methanex Corporation is more favorable than Westlake Chemical Corporation.
Methanex Corporation beats Westlake Chemical Corporation on 9 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 Methanex Corporation
Methanex Corp is a Canada-based producer and supplier of methanol to a range of international markets. The Company operates production sites in Canada, Chile, Egypt, New Zealand, the United States, as well as Trinidad and Tobago. Its global operations are supported by a global supply chain of terminals, storage facilities and a fleet of methanol ocean tankers. The Company’s subsidiary, Waterfront Shipping Company Limited, operates its fleet, which is made up of over 20 vessels ranging from 3,000 to 50,000 deadweight tons of capacity. It has over three production facilities in New Zealand that supply methanol primarily to customers in Asia Pacific. The Company operates over two plants in Trinidad, Titan and Atlas, which supply methanol to markets in North America, Europe, Asia Pacific and South America. Its joint venture facility in Egypt supplies methanol to markets in Europe and Asia Pacific. Its plant in Medicine Hat, Alberta, supplies methanol to customers in North America.
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