Financial Comparison: Air Products and Chemicals (APD) versus Westlake Chemical Partners (WLKP)
Air Products and Chemicals (NYSE: APD) and Westlake Chemical Partners (NYSE:WLKP) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.
Valuation & Earnings
This table compares Air Products and Chemicals and Westlake Chemical Partners’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Air Products and Chemicals||$9.95 billion||3.19||$3.18 billion||$13.33||10.93|
|Westlake Chemical Partners||$1.09 billion||0.60||$456.12 million||$1.42||16.97|
Air Products and Chemicals has higher revenue and earnings than Westlake Chemical Partners. Air Products and Chemicals 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 table compares Air Products and Chemicals and Westlake Chemical Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Air Products and Chemicals||34.63%||17.23%||8.25%|
|Westlake Chemical Partners||3.60%||4.34%||2.54%|
Risk and Volatility
Air Products and Chemicals has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500. Comparatively, Westlake Chemical Partners has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.
Air Products and Chemicals pays an annual dividend of $3.80 per share and has a dividend yield of 2.6%. Westlake Chemical Partners pays an annual dividend of $1.46 per share and has a dividend yield of 6.1%. Air Products and Chemicals pays out 28.5% of its earnings in the form of a dividend. 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. Air Products and Chemicals has increased its dividend for 2 consecutive years and Westlake Chemical Partners has increased its dividend for 34 consecutive years. Westlake Chemical Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of current ratings and target prices for Air Products and Chemicals and Westlake Chemical Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Air Products and Chemicals||1||6||5||0||2.33|
|Westlake Chemical Partners||0||0||2||0||3.00|
Air Products and Chemicals presently has a consensus price target of $153.33, suggesting a potential upside of 5.28%. Westlake Chemical Partners has a consensus price target of $26.50, suggesting a potential upside of 9.96%. Given Westlake Chemical Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Westlake Chemical Partners is more favorable than Air Products and Chemicals.
Institutional & Insider Ownership
88.1% of Air Products and Chemicals shares are owned by institutional investors. Comparatively, 73.3% of Westlake Chemical Partners shares are owned by institutional investors. 0.4% of Air Products and Chemicals shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Air Products and Chemicals beats Westlake Chemical Partners on 13 of the 17 factors compared between the two stocks.
Air Products and Chemicals Company Profile
Air Products and Chemicals, Inc., is an industrial gases company. The Company’s Industrial Gases business provides atmospheric and process gases and related equipment to manufacturing markets, including refining and petrochemical, metals, electronics, and food and beverage. The Company is also a supplier of liquefied natural gas process technology and equipment. The Company operates through five segments: Industrial Gases-Americas, Industrial Gases-Europe, Middle East, and Africa (EMEA), Industrial Gases-Asia, Industrial Gases-Global, and Corporate and other.
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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