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WLK

Westlake NYSE:WLK Stock Report

Last Price

US$99.60

Market Cap

US$12.2b

7D

0.2%

1Y

9.1%

Updated

24 Jun, 2022

Data

Company Financials +
WLK fundamental analysis
Snowflake Score
Valuation5/6
Future Growth0/6
Past Performance6/6
Financial Health4/6
Dividends4/6

WLK Stock Overview

Westlake Corporation manufactures and supplies petrochemicals, polymers, and building products worldwide.

Westlake Competitors

 

 

 

 

 

 

 

 

 

 

 

 

Price History & Performance

Summary of all time highs, changes and price drops for Westlake
Historical stock prices
Current Share PriceUS$99.60
52 Week HighUS$141.19
52 Week LowUS$78.06
Beta1.18
1 Month Change-21.20%
3 Month Change-21.70%
1 Year Change9.09%
3 Year Change43.39%
5 Year Change50.43%
Change since IPO1,259.73%

Recent News & Updates

Jun 09

Westlake: Despite Expected Slowdown, Stock Is Priced At 10x FCF

Westlake has been on a mighty aggressive acquisition path of late. This has led to strong topline growth. But how fast is Westlake's organic growth? That's more difficult to ascertain. Westlake will exit 2022 with a net debt to EBITDA ratio below 1x. Even if we allow some room for margin compression in 2022, Westlake is priced at approximately 10x free cash flow. That's an attractive multiple for investors. I rate the stock a buy. Looking forward to discussing my thesis further in the comments section.

Jun 07
At US$133, Is Westlake Corporation (NYSE:WLK) Worth Looking At Closely?

At US$133, Is Westlake Corporation (NYSE:WLK) Worth Looking At Closely?

Today we're going to take a look at the well-established Westlake Corporation ( NYSE:WLK ). The company's stock led the...

Shareholder Returns

WLKUS ChemicalsUS Market
7D0.2%-0.004%4.0%
1Y9.1%-11.8%-20.5%

Return vs Industry: WLK exceeded the US Chemicals industry which returned -11.8% over the past year.

Return vs Market: WLK exceeded the US Market which returned -20.5% over the past year.

Price Volatility

Is WLK's price volatile compared to industry and market?
WLK volatility
WLK Average Weekly Movement5.7%
Chemicals Industry Average Movement6.7%
Market Average Movement7.9%
10% most volatile stocks in US Market16.5%
10% least volatile stocks in US Market3.1%

Stable Share Price: WLK is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: WLK's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
198614,550Albert Chaohttps://www.westlake.com

Westlake Corporation manufactures and supplies petrochemicals, polymers, and building products worldwide. It operates through two segments, Performance and Essential Materials; and Housing and Infrastructure Products. The Performance and Essential Materials segment manufactures and markets polyethylene, styrene monomer, ethylene co-products, PVC, VCM, ethylene dichloride chlor-alkali, and chlorinated derivative products.

Westlake Fundamentals Summary

How do Westlake's earnings and revenue compare to its market cap?
WLK fundamental statistics
Market CapUS$12.17b
Earnings (TTM)US$2.52b
Revenue (TTM)US$13.48b

5.1x

P/E Ratio

0.9x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
WLK income statement (TTM)
RevenueUS$13.48b
Cost of RevenueUS$9.21b
Gross ProfitUS$4.27b
Other ExpensesUS$1.76b
EarningsUS$2.52b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)19.61
Gross Margin31.69%
Net Profit Margin18.67%
Debt/Equity Ratio55.8%

How did WLK perform over the long term?

See historical performance and comparison

Dividends

1.2%

Current Dividend Yield

6%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is WLK undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for WLK?

Other financial metrics that can be useful for relative valuation.

WLK key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.3x
Enterprise Value/EBITDA4x
PEG Ratio-0.4x

Price to Earnings Ratio vs Peers

How does WLK's PE Ratio compare to its peers?

WLK PE Ratio vs Peers
The above table shows the PE ratio for WLK vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average6.9x

Price-To-Earnings vs Peers: WLK is good value based on its Price-To-Earnings Ratio (5.1x) compared to the peer average (6.9x).


Price to Earnings Ratio vs Industry

How does WLK's PE Ratio compare vs other companies in the U.S. Chemicals Industry?

Price-To-Earnings vs Industry: WLK is good value based on its Price-To-Earnings Ratio (5.1x) compared to the US Chemicals industry average (15.4x)


Price to Earnings Ratio vs Fair Ratio

What is WLK's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

WLK PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio5.1x
Fair PE Ratio11.2x

Price-To-Earnings vs Fair Ratio: WLK is good value based on its Price-To-Earnings Ratio (5.1x) compared to the estimated Fair Price-To-Earnings Ratio (11.2x).


Share Price vs Fair Value

What is the Fair Price of WLK when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: WLK ($99.6) is trading below our estimate of fair value ($390.61)

Significantly Below Fair Value: WLK is trading below fair value by more than 20%.


Price to Earnings Growth Ratio

PEG Ratio: WLK's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


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Future Growth

How is Westlake forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-12.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WLK's earnings are forecast to decline over the next 3 years (-12.9% per year).

Earnings vs Market: WLK's earnings are forecast to decline over the next 3 years (-12.9% per year).

High Growth Earnings: WLK's earnings are forecast to decline over the next 3 years.

Revenue vs Market: WLK's revenue (0.04% per year) is forecast to grow slower than the US market (8.3% per year).

High Growth Revenue: WLK's revenue (0.04% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WLK's Return on Equity is forecast to be low in 3 years time (17.6%).


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Past Performance

How has Westlake performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


10.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: WLK has high quality earnings.

Growing Profit Margin: WLK's current net profit margins (18.7%) are higher than last year (5.4%).


Past Earnings Growth Analysis

Earnings Trend: WLK's earnings have grown by 10.6% per year over the past 5 years.

Accelerating Growth: WLK's earnings growth over the past year (492%) exceeds its 5-year average (10.6% per year).

Earnings vs Industry: WLK earnings growth over the past year (492%) exceeded the Chemicals industry 30.2%.


Return on Equity

High ROE: WLK's Return on Equity (27.9%) is considered high.


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Financial Health

How is Westlake's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: WLK's short term assets ($5.4B) exceed its short term liabilities ($2.6B).

Long Term Liabilities: WLK's short term assets ($5.4B) do not cover its long term liabilities ($7.9B).


Debt to Equity History and Analysis

Debt Level: WLK's net debt to equity ratio (44.4%) is considered high.

Reducing Debt: WLK's debt to equity ratio has reduced from 89.3% to 55.8% over the past 5 years.

Debt Coverage: WLK's debt is well covered by operating cash flow (54.8%).

Interest Coverage: WLK's interest payments on its debt are well covered by EBIT (20.6x coverage).


Balance Sheet


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Dividend

What is Westlake current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


1.19%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: WLK's dividend (1.19%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.62%).

High Dividend: WLK's dividend (1.19%) is low compared to the top 25% of dividend payers in the US market (4.34%).


Stability and Growth of Payments

Stable Dividend: WLK's dividends per share have been stable in the past 10 years.

Growing Dividend: WLK's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (5.9%), WLK's dividend payments are thoroughly covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (7.5%), WLK's dividend payments are thoroughly covered by cash flows.


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Management

How experienced are the management team and are they aligned to shareholders interests?

7.6yrs

Average management tenure


CEO

Albert Chao (71 yo)

26.08yrs

Tenure

US$9,892,719

Compensation

Mr. Albert Yuan Chao serves as the Chief Executive Officer, President and Managing Director of Vinnolit GmbH & Co. KG. Mr. Chao has been President, Chief Executive Officer and Director of Westlake Chemical...


CEO Compensation Analysis

Compensation vs Market: Albert's total compensation ($USD9.89M) is about average for companies of similar size in the US market ($USD13.59M).

Compensation vs Earnings: Albert's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: WLK's management team is seasoned and experienced (7.6 years average tenure).


Board Members

Experienced Board: WLK's board of directors are considered experienced (4.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Westlake Corporation's employee growth, exchange listings and data sources


Key Information

  • Name: Westlake Corporation
  • Ticker: WLK
  • Exchange: NYSE
  • Founded: 1986
  • Industry: Commodity Chemicals
  • Sector: Materials
  • Implied Market Cap: US$12.169b
  • Shares outstanding: 128.33m
  • Website: https://www.westlake.com

Number of Employees


Location

  • Westlake Corporation
  • 2801 Post Oak Boulevard
  • Suite 600
  • Houston
  • Texas
  • 77056
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/06/24 00:00
End of Day Share Price2022/06/24 00:00
Earnings2022/03/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.