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

Volatility & Risk

Trecora Resources has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, Westlake Chemical Partners has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Dividends

Westlake Chemical Partners pays an annual dividend of $1.46 per share. Trecora Resources does not pay 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. Westlake Chemical Partners has raised its dividend for 2 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Trecora Resources 0.97% 3.94% 2.23%
Westlake Chemical Partners 3.60% 4.34% 2.54%

Valuation and Earnings

This table compares Trecora Resources and Westlake Chemical Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Trecora Resources $212.40 0.00 $19.42 $0.09 N/A
Westlake Chemical Partners $986.74 0.00 $40.94 $1.42 N/A

Westlake Chemical Partners has higher revenue and earnings than Trecora Resources.

Insider and Institutional Ownership

41.2% of Trecora Resources shares are held by institutional investors. Comparatively, 38.9% of Westlake Chemical Partners shares are held by institutional investors. 6.6% of Trecora Resources shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Trecora Resources and Westlake Chemical Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trecora Resources 0 0 3 0 3.00
Westlake Chemical Partners 0 0 2 0 3.00

Trecora Resources presently has a consensus target price of $15.67, suggesting a potential upside of Infinity. Westlake Chemical Partners has a consensus target price of $30.00, suggesting a potential upside of Infinity.

Summary

Westlake Chemical Partners beats Trecora Resources on 7 of the 13 factors compared between the two stocks.

Trecora Resources Company Profile

Trecora Resources (TREC) is a provider of high-purity specialty hydrocarbons and waxes. TREC owns and operates a facility located in southeast Texas, just north of Beaumont, which specializes in high-purity hydrocarbons and other petrochemical manufacturing. The Company operates through two segments: specialty petrochemical products and specialty synthetic waxes. The specialty petrochemical products segment operates through South Hampton Resources, Inc. (SHR). The specialty synthetic wax segment operates through Trecora Chemical, Inc. (TC). SHR owns and operates a specialty petrochemical facility that produces hydrocarbons and other petroleum-based products, including isopentane, normal pentane, isohexane and hexane. TC produces specialty polyethylene and poly alpha olefin waxes, and provides custom processing services. In addition, the Company is the 33.4% owner of Al Masane Al Kobra Mining Co., a Saudi Arabian joint stock company.

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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