WESTLAKE CORP (WLK)

US9604131022 - Common Stock

136.45  +3.9 (+2.94%)

Fundamental Rating

4

WLK gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 84 industry peers in the Chemicals industry. Both the profitability and the financial health of WLK get a neutral evaluation. Nothing too spectacular is happening here. WLK does not seem to be growing, but still is valued expensively.



4

1. Profitability

1.1 Basic Checks

In the past year WLK was profitable.
WLK had a positive operating cash flow in the past year.
In the past 5 years WLK has always been profitable.
WLK had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 1.29%, WLK is in line with its industry, outperforming 45.24% of the companies in the same industry.
WLK has a Return On Equity (2.57%) which is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 3.83%, WLK is in line with its industry, outperforming 50.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WLK is above the industry average of 6.32%.
The 3 year average ROIC (10.46%) for WLK is well above the current ROIC(3.83%). The reason for the recent decline needs to be investigated.
Industry RankSector Rank
ROA 1.29%
ROE 2.57%
ROIC 3.83%
ROA(3y)8%
ROA(5y)5.91%
ROE(3y)17.45%
ROE(5y)12.99%
ROIC(3y)10.46%
ROIC(5y)7.72%

1.3 Margins

WLK has a Profit Margin (2.24%) which is in line with its industry peers.
WLK's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 7.68%, WLK is in line with its industry, outperforming 50.00% of the companies in the same industry.
WLK's Operating Margin has declined in the last couple of years.
WLK has a worse Gross Margin (15.80%) than 70.24% of its industry peers.
In the last couple of years the Gross Margin of WLK has declined.
Industry RankSector Rank
OM 7.68%
PM (TTM) 2.24%
GM 15.8%
OM growth 3Y16.58%
OM growth 5Y-10.07%
PM growth 3Y-4.71%
PM growth 5Y-19.86%
GM growth 3Y9.06%
GM growth 5Y-5.13%

6

2. Health

2.1 Basic Checks

WLK has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
WLK has more shares outstanding than it did 1 year ago.
WLK has about the same amout of shares outstanding than it did 5 years ago.
WLK has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 2.62 indicates that WLK is not a great score, but indicates only limited risk for bankruptcy at the moment.
WLK has a better Altman-Z score (2.62) than 72.62% of its industry peers.
WLK has a debt to FCF ratio of 7.59. This is a slightly negative value and a sign of low solvency as WLK would need 7.59 years to pay back of all of its debts.
The Debt to FCF ratio of WLK (7.59) is better than 63.10% of its industry peers.
WLK has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of WLK (0.43) is better than 65.48% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.43
Debt/FCF 7.59
Altman-Z 2.62
ROIC/WACC0.51
WACC7.5%

2.3 Liquidity

A Current Ratio of 2.61 indicates that WLK has no problem at all paying its short term obligations.
WLK has a better Current ratio (2.61) than 66.67% of its industry peers.
WLK has a Quick Ratio of 1.94. This is a normal value and indicates that WLK is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.94, WLK is doing good in the industry, outperforming 75.00% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.61
Quick Ratio 1.94

3

3. Growth

3.1 Past

The earnings per share for WLK have decreased strongly by -37.22% in the last year.
Measured over the past 5 years, WLK shows a small growth in Earnings Per Share. The EPS has been growing by 1.36% on average per year.
The Revenue for WLK has decreased by -20.55% in the past year. This is quite bad
WLK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.76% yearly.
EPS 1Y (TTM)-37.22%
EPS 3Y53.93%
EPS 5Y1.36%
EPS Q2Q%-35.91%
Revenue 1Y (TTM)-20.55%
Revenue growth 3Y18.69%
Revenue growth 5Y7.76%
Sales Q2Q%0.06%

3.2 Future

The Earnings Per Share is expected to grow by 8.15% on average over the next years. This is quite good.
WLK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.20% yearly.
EPS Next Y-7.34%
EPS Next 2Y2.98%
EPS Next 3Y8.15%
EPS Next 5YN/A
Revenue Next Year-0.63%
Revenue Next 2Y2.83%
Revenue Next 3Y3.2%
Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

3

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 23.25, WLK is valued on the expensive side.
WLK's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.91, WLK is valued at the same level.
With a Price/Forward Earnings ratio of 15.54, WLK is valued correctly.
Based on the Price/Forward Earnings ratio, WLK is valued a bit cheaper than the industry average as 60.71% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of WLK to the average of the S&P500 Index (23.57), we can say WLK is valued slightly cheaper.
Industry RankSector Rank
PE 23.25
Fwd PE 15.54

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WLK indicates a somewhat cheap valuation: WLK is cheaper than 69.05% of the companies listed in the same industry.
WLK's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 27.2
EV/EBITDA 9.26

4.3 Compensation for Growth

PEG (NY)N/A
PEG (5Y)17.12
EPS Next 2Y2.98%
EPS Next 3Y8.15%

4

5. Dividend

5.1 Amount

WLK has a Yearly Dividend Yield of 1.58%.
WLK's Dividend Yield is comparable with the industry average which is at 2.89.
WLK's Dividend Yield is slightly below the S&P500 average, which is at 2.26.
Industry RankSector Rank
Dividend Yield 1.58%

5.2 History

The dividend of WLK is nicely growing with an annual growth rate of 13.11%!
WLK has been paying a dividend for at least 10 years, so it has a reliable track record.
WLK has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)13.11%
Div Incr Years19
Div Non Decr Years19

5.3 Sustainability

WLK pays out 95.22% of its income as dividend. This is not a sustainable payout ratio.
WLK's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP95.22%
EPS Next 2Y2.98%
EPS Next 3Y8.15%

WESTLAKE CORP

NYSE:WLK (11/6/2024, 3:20:08 PM)

136.45

+3.9 (+2.94%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap17.55B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 1.58%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 23.25
Fwd PE 15.54
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)17.12
Profitability
Industry RankSector Rank
ROA 1.29%
ROE 2.57%
ROCE
ROIC
ROICexc
ROICexgc
OM 7.68%
PM (TTM) 2.24%
GM 15.8%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.58
Health
Industry RankSector Rank
Debt/Equity 0.43
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 2.61
Quick Ratio 1.94
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-37.22%
EPS 3Y53.93%
EPS 5Y
EPS Q2Q%
EPS Next Y-7.34%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-20.55%
Revenue growth 3Y18.69%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y