Critical Comparison: Airgas (ARG) vs. Westlake Chemical Partners (WLKP)
Airgas (NYSE: ARG) and Westlake Chemical Partners (NYSE:WLKP) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.
Valuation and Earnings
This table compares Airgas and Westlake Chemical Partners’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Westlake Chemical Partners||$1.09 billion||0.59||$456.12 million||$1.42||16.80|
Westlake Chemical Partners has higher revenue and earnings than Airgas.
This table compares Airgas and Westlake Chemical Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Westlake Chemical Partners||3.60%||4.34%||2.54%|
This is a breakdown of recent ratings and recommmendations for Airgas and Westlake Chemical Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westlake Chemical Partners||0||0||2||0||3.00|
Westlake Chemical Partners has a consensus target price of $26.50, suggesting a potential upside of 11.11%. Given Westlake Chemical Partners’ higher possible upside, analysts clearly believe Westlake Chemical Partners is more favorable than Airgas.
Insider and Institutional Ownership
79.3% of Westlake Chemical Partners shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Westlake Chemical Partners pays an annual dividend of $1.46 per share and has a dividend yield of 6.1%. Airgas 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. Airgas has increased its dividend for 2 consecutive years and Westlake Chemical Partners has increased its dividend for 14 consecutive years.
Westlake Chemical Partners beats Airgas on 6 of the 10 factors compared between the two stocks.
Airgas Company Profile
Airgas, Inc. is a supplier of industrial, medical and specialty gases, and hard goods, such as welding equipment and related products. The Company is also a producer of atmospheric gases, carbon dioxide, dry ice and nitrous oxide and a supplier of safety products, refrigerants, ammonia products and process chemicals. It operates through two segments: Distribution and All Other Operations. The Distribution segment offers a portfolio of related gas and hard goods products and services to the end customers. The All Other Operations segment consists of five business units which manufacture or distribute carbon dioxide, dry ice, nitrous oxide, ammonia and refrigerant gases. It also offers supply chain management services and solutions, and product and process technical support across many customer segments. It markets its products and services through multiple sales channels, including branch-based sales representatives, retail stores and strategic customer account programs, among others.
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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