WESTLAKE CORP (WLK) Stock Fundamental Analysis
NYSE:WLK - New York Stock Exchange, Inc. - US9604131022 - Common Stock - Currency: USD
Taking everything into account, WLK scores 4 out of 10 in our fundamental rating. WLK was compared to 85 industry peers in the Chemicals industry. WLK has only an average score on both its financial health and profitability. WLK has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year WLK was profitable.
WLK had a positive operating cash flow in the past year.
WLK had positive earnings in each of the past 5 years.
WLK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 1.86%, WLK perfoms like the industry average, outperforming 57.65% of the companies in the same industry.
WLK has a Return On Equity (3.70%) which is comparable to the rest of the industry.
WLK has a Return On Invested Capital of 2.78%. This is in the lower half of the industry: WLK underperforms 64.71% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WLK is in line with the industry average of 6.80%.
The 3 year average ROIC (6.90%) for WLK is well above the current ROIC(2.78%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.86% | ||
| ROE | 3.7% | ||
| ROIC | 2.78% |
ROA(3y)5.34%
ROA(5y)5.85%
ROE(3y)10.95%
ROE(5y)12.7%
ROIC(3y)6.9%
ROIC(5y)7.19%
1.3 Margins
With a Profit Margin value of 3.20%, WLK perfoms like the industry average, outperforming 60.00% of the companies in the same industry.
WLK's Profit Margin has been stable in the last couple of years.
WLK has a worse Operating Margin (5.94%) than 62.35% of its industry peers.
In the last couple of years the Operating Margin of WLK has remained more or less at the same level.
The Gross Margin of WLK (14.34%) is worse than 75.29% of its industry peers.
WLK's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.94% | ||
| PM (TTM) | 3.2% | ||
| GM | 14.34% |
OM growth 3Y-30.74%
OM growth 5Y-1.4%
PM growth 3Y-33.82%
PM growth 5Y-0.9%
GM growth 3Y-18.41%
GM growth 5Y0.76%
2. Health
2.1 Basic Checks
WLK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
WLK has about the same amout of 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 2.21 indicates that WLK is not a great score, but indicates only limited risk for bankruptcy at the moment.
WLK has a Altman-Z score of 2.21. This is comparable to the rest of the industry: WLK outperforms 60.00% of its industry peers.
The Debt to FCF ratio of WLK is 54.89, which is on the high side as it means it would take WLK, 54.89 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 54.89, WLK perfoms like the industry average, outperforming 42.35% of the companies in the same industry.
WLK has a Debt/Equity ratio of 0.44. This is a healthy value indicating a solid balance between debt and equity.
WLK has a better Debt to Equity ratio (0.44) than 68.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 54.89 | ||
| Altman-Z | 2.21 |
ROIC/WACC0.34
WACC8.07%
2.3 Liquidity
WLK has a Current Ratio of 2.64. This indicates that WLK is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.64, WLK is doing good in the industry, outperforming 74.12% of the companies in the same industry.
A Quick Ratio of 1.86 indicates that WLK should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.86, WLK is in the better half of the industry, outperforming 74.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.64 | ||
| Quick Ratio | 1.86 |
3. Growth
3.1 Past
WLK shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -45.81%.
The Earnings Per Share has been growing by 9.83% on average over the past years. This is quite good.
Looking at the last year, WLK shows a decrease in Revenue. The Revenue has decreased by -1.27% in the last year.
Measured over the past years, WLK shows a quite strong growth in Revenue. The Revenue has been growing by 8.38% on average per year.
EPS 1Y (TTM)-45.81%
EPS 3Y-30.59%
EPS 5Y9.83%
EPS Q2Q%-123.13%
Revenue 1Y (TTM)-1.27%
Revenue growth 3Y1.02%
Revenue growth 5Y8.38%
Sales Q2Q%-4.34%
3.2 Future
The Earnings Per Share is expected to grow by 2.09% on average over the next years.
WLK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.06% yearly.
EPS Next Y-79.46%
EPS Next 2Y-13.43%
EPS Next 3Y2.09%
EPS Next 5YN/A
Revenue Next Year-3.94%
Revenue Next 2Y1.21%
Revenue Next 3Y3.06%
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 decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.28, which indicates a rather expensive current valuation of WLK.
WLK's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.25, WLK is valued at the same level.
WLK is valuated rather expensively with a Price/Forward Earnings ratio of 20.31.
The rest of the industry has a similar Price/Forward Earnings ratio as WLK.
WLK is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 36.80, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.28 | ||
| Fwd PE | 20.31 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WLK is valued cheaply inside the industry as 82.35% of the companies are valued more expensively.
WLK's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 121.06 | ||
| EV/EBITDA | 6.62 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.27
EPS Next 2Y-13.43%
EPS Next 3Y2.09%
5. Dividend
5.1 Amount
WLK has a Yearly Dividend Yield of 2.55%.
WLK's Dividend Yield is a higher than the industry average which is at 3.57.
Compared to an average S&P500 Dividend Yield of 2.34, WLK has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.55% |
5.2 History
On average, the dividend of WLK grows each year by 14.83%, which is quite nice.
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)14.83%
Div Incr Years20
Div Non Decr Years20
5.3 Sustainability
WLK pays out 69.35% 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.
DP69.35%
EPS Next 2Y-13.43%
EPS Next 3Y2.09%
79.3
-0.35 (-0.44%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners28.81%
Inst Owner Change-0.19%
Ins Owners1.25%
Ins Owner Change3.91%
Market Cap10.17B
Analysts72.38
Price Target91.57 (15.47%)
Short Float %10.73%
Short Ratio2.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.55% |
Yearly Dividend2.06
Dividend Growth(5Y)14.83%
DP69.35%
Div Incr Years20
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-120.96%
Min EPS beat(2)-147.34%
Max EPS beat(2)-94.57%
EPS beat(4)1
Avg EPS beat(4)-64.75%
Min EPS beat(4)-147.34%
Max EPS beat(4)19.61%
EPS beat(8)3
Avg EPS beat(8)-32.68%
EPS beat(12)5
Avg EPS beat(12)-21.77%
EPS beat(16)9
Avg EPS beat(16)-12.24%
Revenue beat(2)0
Avg Revenue beat(2)-4.37%
Min Revenue beat(2)-4.46%
Max Revenue beat(2)-4.28%
Revenue beat(4)0
Avg Revenue beat(4)-4.31%
Min Revenue beat(4)-6.62%
Max Revenue beat(4)-1.9%
Revenue beat(8)1
Avg Revenue beat(8)-4.02%
Revenue beat(12)2
Avg Revenue beat(12)-2.98%
Revenue beat(16)6
Avg Revenue beat(16)0.75%
PT rev (1m)1.11%
PT rev (3m)-24.52%
EPS NQ rev (1m)-52.99%
EPS NQ rev (3m)-88.17%
EPS NY rev (1m)-15.79%
EPS NY rev (3m)-78.39%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)-5.51%
Revenue NY rev (1m)-0.22%
Revenue NY rev (3m)-4.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.28 | ||
| Fwd PE | 20.31 | ||
| P/S | 0.85 | ||
| P/FCF | 121.06 | ||
| P/OCF | 9.52 | ||
| P/B | 0.98 | ||
| P/tB | 1.43 | ||
| EV/EBITDA | 6.62 |
EPS(TTM)3.56
EY4.49%
EPS(NY)3.9
Fwd EY4.92%
FCF(TTM)0.66
FCFY0.83%
OCF(TTM)8.33
OCFY10.5%
SpS93.68
BVpS81.18
TBVpS55.51
PEG (NY)N/A
PEG (5Y)2.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.86% | ||
| ROE | 3.7% | ||
| ROCE | 3.87% | ||
| ROIC | 2.78% | ||
| ROICexc | 3.21% | ||
| ROICexgc | 4.05% | ||
| OM | 5.94% | ||
| PM (TTM) | 3.2% | ||
| GM | 14.34% | ||
| FCFM | 0.7% |
ROA(3y)5.34%
ROA(5y)5.85%
ROE(3y)10.95%
ROE(5y)12.7%
ROIC(3y)6.9%
ROIC(5y)7.19%
ROICexc(3y)8.06%
ROICexc(5y)8.28%
ROICexgc(3y)10.44%
ROICexgc(5y)10.79%
ROCE(3y)9.62%
ROCE(5y)10.02%
ROICexcg growth 3Y-33.41%
ROICexcg growth 5Y1.51%
ROICexc growth 3Y-32.2%
ROICexc growth 5Y0.16%
OM growth 3Y-30.74%
OM growth 5Y-1.4%
PM growth 3Y-33.82%
PM growth 5Y-0.9%
GM growth 3Y-18.41%
GM growth 5Y0.76%
F-Score6
Asset Turnover0.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 54.89 | ||
| Debt/EBITDA | 2.5 | ||
| Cap/Depr | 87.54% | ||
| Cap/Sales | 8.19% | ||
| Interest Coverage | 4.61 | ||
| Cash Conversion | 58.11% | ||
| Profit Quality | 21.82% | ||
| Current Ratio | 2.64 | ||
| Quick Ratio | 1.86 | ||
| Altman-Z | 2.21 |
F-Score6
WACC8.07%
ROIC/WACC0.34
Cap/Depr(3y)96.56%
Cap/Depr(5y)87.18%
Cap/Sales(3y)7.85%
Cap/Sales(5y)7.23%
Profit Quality(3y)142.31%
Profit Quality(5y)149.64%
High Growth Momentum
Growth
EPS 1Y (TTM)-45.81%
EPS 3Y-30.59%
EPS 5Y9.83%
EPS Q2Q%-123.13%
EPS Next Y-79.46%
EPS Next 2Y-13.43%
EPS Next 3Y2.09%
EPS Next 5YN/A
Revenue 1Y (TTM)-1.27%
Revenue growth 3Y1.02%
Revenue growth 5Y8.38%
Sales Q2Q%-4.34%
Revenue Next Year-3.94%
Revenue Next 2Y1.21%
Revenue Next 3Y3.06%
Revenue Next 5YN/A
EBIT growth 1Y-22.39%
EBIT growth 3Y-30.04%
EBIT growth 5Y6.87%
EBIT Next Year49.44%
EBIT Next 3Y29.44%
EBIT Next 5YN/A
FCF growth 1Y-95.99%
FCF growth 3Y-43.93%
FCF growth 5Y-9.85%
OCF growth 1Y-66.7%
OCF growth 3Y-18.12%
OCF growth 5Y0.2%