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

Profitability

This table compares Albemarle Corporation and Westlake Chemical Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Albemarle Corporation 31.49% 11.59% 5.42%
Westlake Chemical Partners 3.60% 4.34% 2.54%

Earnings & Valuation

This table compares Albemarle Corporation and Westlake Chemical Partners’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Albemarle Corporation $2.81 billion 5.49 $744.58 million $7.80 17.91
Westlake Chemical Partners $1.09 billion 0.56 $456.12 million $1.42 15.81

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.

Dividends

Albemarle Corporation pays an annual dividend of $1.28 per share and has a dividend yield of 0.9%. Westlake Chemical Partners pays an annual dividend of $1.46 per share and has a dividend yield of 6.5%. Albemarle Corporation pays out 16.4% 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. Albemarle Corporation has increased its dividend for 2 consecutive years and Westlake Chemical Partners has increased its dividend for 13 consecutive years. Westlake Chemical Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

83.8% of Albemarle Corporation shares are owned by institutional investors. Comparatively, 73.3% of Westlake Chemical Partners shares are owned by institutional investors. 0.7% of Albemarle Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

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

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

Albemarle Corporation presently has a consensus price target of $115.24, indicating a potential downside of 17.49%. Westlake Chemical Partners has a consensus price target of $26.50, indicating a potential upside of 18.04%. Given Westlake Chemical Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Westlake Chemical Partners is more favorable than Albemarle Corporation.

Risk & Volatility

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

Summary

Albemarle Corporation beats Westlake Chemical Partners on 13 of the 17 factors compared between the two stocks.

About Albemarle Corporation

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.

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.

Receive News & Ratings for Albemarle Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Albemarle Corporation and related companies with MarketBeat.com's FREE daily email newsletter.