Critical Review: Celanese Corporation (CE) versus Westlake Chemical Corporation (WLK)
Celanese Corporation (NYSE: CE) and Westlake Chemical Corporation (NYSE:WLK) are both large-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.
Celanese Corporation pays an annual dividend of $1.84 per share and has a dividend yield of 1.7%. Westlake Chemical Corporation pays an annual dividend of $0.84 per share and has a dividend yield of 1.0%. Celanese Corporation pays out 31.2% of its earnings in the form of a dividend. Westlake Chemical Corporation pays out 24.0% 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. Celanese Corporation has increased its dividend for 5 consecutive years and Westlake Chemical Corporation has increased its dividend for 13 consecutive years.
Volatility & Risk
Celanese Corporation has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Westlake Chemical Corporation has a beta of 1.63, suggesting that its share price is 63% more volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for Celanese Corporation and Westlake Chemical Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westlake Chemical Corporation||0||2||10||0||2.83|
Celanese Corporation currently has a consensus target price of $102.62, indicating a potential downside of 4.92%. Westlake Chemical Corporation has a consensus target price of $77.22, indicating a potential downside of 8.65%. Given Celanese Corporation’s higher probable upside, analysts clearly believe Celanese Corporation is more favorable than Westlake Chemical Corporation.
Valuation and Earnings
This table compares Celanese Corporation and Westlake Chemical Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Celanese Corporation||$5.62 billion||2.64||$1.16 billion||$5.89||18.32|
|Westlake Chemical Corporation||$6.94 billion||1.57||$1.33 billion||$3.50||24.15|
Westlake Chemical Corporation has higher revenue and earnings than Celanese Corporation. Celanese 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 Celanese Corporation and Westlake Chemical 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%|
Insider and Institutional Ownership
97.2% of Celanese Corporation shares are owned by institutional investors. Comparatively, 32.0% of Westlake Chemical Corporation shares are owned by institutional investors. 0.4% of Celanese Corporation shares are owned by company insiders. Comparatively, 71.7% of Westlake Chemical Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Celanese Corporation Company Profile
Celanese Corporation (Celanese) is a technology and specialty materials company. The Company’s segments include Advanced Engineered Materials, Consumer Specialties, Industrial Specialties, Acetyl Intermediates and Other Activities. The Advanced Engineered Materials segment includes the Company’s engineered materials business and certain affiliates. The Consumer Specialties segment includes the Company’s cellulose derivatives and food ingredients businesses, which serve consumer-driven applications. The Industrial Specialties segment includes the Company’s emulsion polymers and ethylene vinyl acetate (EVA) polymers businesses. The Acetyl Intermediates segment includes the Company’s intermediate chemistry business, which produces and supplies acetyl products, including acetic acid, vinyl acetate monomer (VAM), acetic anhydride and acetate esters. The Company has operations in North America, Europe and Asia. As of December 31, 2016, the Company had 30 global production facilities.
Westlake Chemical Corporation Company Profile
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.
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