Analyzing Westlake Chemical (WLK) and A Schulman (SHLM)
Westlake Chemical (NYSE: WLK) and A Schulman (NASDAQ:SHLM) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.
This table compares Westlake Chemical and A Schulman’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This table compares Westlake Chemical and A Schulman’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Westlake Chemical||$5.08 billion||2.72||$398.85 million||$4.61||23.20|
|A Schulman||$2.46 billion||0.52||$33.02 million||$1.26||34.44|
Westlake Chemical has higher revenue and earnings than A Schulman. Westlake Chemical is trading at a lower price-to-earnings ratio than A Schulman, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Westlake Chemical has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500. Comparatively, A Schulman has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for Westlake Chemical and A Schulman, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Westlake Chemical presently has a consensus price target of $108.33, suggesting a potential upside of 1.28%. A Schulman has a consensus price target of $37.00, suggesting a potential downside of 14.75%. Given Westlake Chemical’s stronger consensus rating and higher probable upside, analysts plainly believe Westlake Chemical is more favorable than A Schulman.
Institutional & Insider Ownership
32.8% of Westlake Chemical shares are owned by institutional investors. Comparatively, 80.3% of A Schulman shares are owned by institutional investors. 72.5% of Westlake Chemical shares are owned by insiders. Comparatively, 3.3% of A Schulman shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Westlake Chemical pays an annual dividend of $0.84 per share and has a dividend yield of 0.8%. A Schulman pays an annual dividend of $0.82 per share and has a dividend yield of 1.9%. Westlake Chemical pays out 18.2% of its earnings in the form of a dividend. A Schulman pays out 65.1% 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. Westlake Chemical has increased its dividend for 14 consecutive years.
Westlake Chemical beats A Schulman on 13 of the 17 factors compared between the two stocks.
About Westlake Chemical
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.
About A Schulman
A. Schulman, Inc. is an international supplier of plastic formulations, resins and services, and provides solutions to its customers’ requirements through custom-formulated products. The Company’s customers span a range of markets, such as packaging, mobility, building and construction, electronics and electrical, agriculture, personal care and hygiene, custom services, and sports, home and leisure. The Company’s segments include Europe, Middle East and Africa (EMEA), the United States and Canada (USCAN), Latin America (LATAM), Asia Pacific (APAC) and Engineered Composites (EC). As of August 31, 2016, the Company operated in six product families, including custom performance colors (CPC), engineered composites, Masterbatch solutions, engineered plastics, specialty powders and distribution services. The CPC product family offers powdered, pelletized and liquid color concentrates that are custom-designed for thermoplastic resins.
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