LyondellBasell (NYSE: LYB) and Westlake Chemical (NYSE:WLK) are both large-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.
Institutional & Insider Ownership
75.1% of LyondellBasell shares are owned by institutional investors. Comparatively, 30.3% of Westlake Chemical shares are owned by institutional investors. 0.1% of LyondellBasell shares are owned by insiders. Comparatively, 72.0% of Westlake Chemical shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a summary of recent ratings and recommmendations for LyondellBasell and Westlake Chemical, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
LyondellBasell presently has a consensus price target of $107.38, indicating a potential downside of 0.87%. Westlake Chemical has a consensus price target of $113.36, indicating a potential upside of 1.92%. Given Westlake Chemical’s higher probable upside, analysts plainly believe Westlake Chemical is more favorable than LyondellBasell.
This table compares LyondellBasell and Westlake Chemical’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares LyondellBasell and Westlake Chemical’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|LyondellBasell||$34.48 billion||1.24||$4.88 billion||$10.23||10.59|
|Westlake Chemical||$8.04 billion||1.79||$1.30 billion||$5.47||20.33|
LyondellBasell has higher revenue and earnings than Westlake Chemical. LyondellBasell is trading at a lower price-to-earnings ratio than Westlake Chemical, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
LyondellBasell has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, Westlake Chemical has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500.
LyondellBasell pays an annual dividend of $4.00 per share and has a dividend yield of 3.7%. Westlake Chemical pays an annual dividend of $0.84 per share and has a dividend yield of 0.8%. LyondellBasell pays out 39.1% of its earnings in the form of a dividend. Westlake Chemical pays out 15.4% 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. LyondellBasell has increased its dividend for 6 consecutive years and Westlake Chemical has increased its dividend for 14 consecutive years.
Westlake Chemical beats LyondellBasell on 9 of the 16 factors compared between the two stocks.
LyondellBasell Company Profile
LyondellBasell Industries N.V. is a chemical company. The Company operates in five segments: Olefins and Polyolefins-Americas (O&P-Americas), Olefins and Polyolefins-Europe, Asia, International (O&P-EAI), Intermediates and Derivatives (I&D), Refining and Technology. The O&P-Americas segment produces and markets olefins and co-products, polyethylene and polypropylene. The O&P-EAI segment produces and markets olefins and co-products, polyethylene and polypropylene. The I&D segment produces and markets propylene oxide (PO) and its derivatives, oxyfuels and related products, and intermediate chemicals, such as styrene monomer (SM), acetyls and ethylene oxides. The primary product of the Refining segment is refined products made from sulfur crude oil and other crude oils of various types and sources available on the United States Gulf Coast. The Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.
Westlake Chemical Company Profile
Westlake Chemical Corporation manufactures and markets basic chemicals, vinyls, polymers, and building products primarily in North America and Europe. It operates through two segments, Olefins and Vinyls. The Olefins segment offers polyethylene, styrene monomers, and various ethylene co-products, as well as sells propylene, crude butadiene, pyrolysis gasoline, and hydrogen products. The Vinyls segment provides specialty and commodity polyvinyl chloride (PVC), vinyl chloride monomers, ethylene dichloride, chlorine, caustic soda, chlorinated derivative, and ethylene products. This segment also manufactures and sells building products fabricated from PVC, including pipe, fittings, profiles, trims, moldings, fence and decking products, window and door components, and film and sheet products. Westlake Chemical Corporation offers its products to a range of customers, including chemical processors, plastics fabricators, small construction contractors, municipalities, and supply warehouses in various consumer and industrial markets, such as flexible and rigid packaging, automotive products, coatings, water treatment, refrigerants, residential and commercial construction, as well as other durable and non-durable goods. The company was founded in 1985 and is headquartered in Houston, Texas. Westlake Chemical Corporation is a subsidiary of TTWF LP.
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