WESTLAKE CORP (WLK)
US9604131022 - Common Stock
We assign a fundamental rating of 4 out of 10 to WLK. WLK was compared to 84 industry peers in the Chemicals industry. WLK has an average financial health and profitability rating. WLK does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
In the past year WLK was profitable.
WLK had a positive operating cash flow in the past year.
Each year in the past 5 years WLK has been profitable.
Each year in the past 5 years WLK had a positive operating cash flow.
1.2 Ratios
WLK has a Return On Assets (2.26%) which is comparable to the rest of the industry.
WLK's Return On Equity of 4.65% is in line compared to the rest of the industry. WLK outperforms 47.62% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.15%, WLK is in line with its industry, outperforming 54.76% of the companies in the same industry.
WLK had an Average Return On Invested Capital over the past 3 years of 10.46%. This is above the industry average of 7.47%.
The 3 year average ROIC (10.46%) for WLK is well above the current ROIC(5.15%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.26% | ||
| ROE | 4.65% | ||
| ROIC | 5.15% |
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
The Profit Margin of WLK (3.79%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of WLK has declined.
WLK has a Operating Margin of 9.82%. This is comparable to the rest of the industry: WLK outperforms 53.57% of its industry peers.
WLK's Operating Margin has declined in the last couple of years.
The Gross Margin of WLK (17.68%) is worse than 66.67% of its industry peers.
WLK's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.82% | ||
| PM (TTM) | 3.79% | ||
| GM | 17.68% |
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%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WLK 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
WLK has an Altman-Z score of 2.74. This is not the best score and indicates that WLK is in the grey zone with still only limited risk for bankruptcy at the moment.
WLK has a better Altman-Z score (2.74) than 75.00% of its industry peers.
WLK has a debt to FCF ratio of 3.78. This is a good value and a sign of high solvency as WLK would need 3.78 years to pay back of all of its debts.
WLK has a Debt to FCF ratio of 3.78. This is in the better half of the industry: WLK outperforms 73.81% of its industry peers.
WLK has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
WLK has a Debt to Equity ratio of 0.45. This is in the better half of the industry: WLK outperforms 61.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 3.78 | ||
| Altman-Z | 2.74 |
ROIC/WACC0.66
WACC7.85%
2.3 Liquidity
A Current Ratio of 2.37 indicates that WLK has no problem at all paying its short term obligations.
WLK has a Current ratio (2.37) which is in line with its industry peers.
WLK has a Quick Ratio of 1.79. This is a normal value and indicates that WLK is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.79, WLK is in the better half of the industry, outperforming 73.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.37 | ||
| Quick Ratio | 1.79 |
3. Growth
3.1 Past
The earnings per share for WLK have decreased strongly by -52.33% in the last year.
WLK shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.36% yearly.
WLK shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -20.55%.
Measured over the past years, WLK shows a small growth in Revenue. The Revenue has been growing by 7.76% on average per year.
EPS 1Y (TTM)-52.33%
EPS 3Y53.93%
EPS 5Y1.36%
EPS growth Q2Q-59.78%
Revenue 1Y (TTM)-20.55%
Revenue growth 3Y18.69%
Revenue growth 5Y7.76%
Revenue growth Q2Q-14.34%
3.2 Future
The Earnings Per Share is expected to grow by 10.26% on average over the next years. This is quite good.
Based on estimates for the next years, WLK will show a small growth in Revenue. The Revenue will grow by 2.71% on average per year.
EPS Next Y-13.93%
EPS Next 2Y6.04%
EPS Next 3Y10.26%
EPS Next 5YN/A
Revenue Next Year-1.95%
Revenue Next 2Y1.92%
Revenue Next 3Y2.71%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
WLK is valuated rather expensively with a Price/Earnings ratio of 17.99.
Based on the Price/Earnings ratio, WLK is valued a bit cheaper than 61.90% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 24.80, WLK is valued a bit cheaper.
A Price/Forward Earnings ratio of 20.90 indicates a rather expensive valuation of WLK.
The rest of the industry has a similar Price/Forward Earnings ratio as WLK.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.27, WLK is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.99 | ||
| Fwd PE | 20.9 |
4.2 Price Multiples
71.43% of the companies in the same industry are more expensive than WLK, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, WLK is valued a bit cheaper than the industry average as 72.62% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.67 | ||
| EV/EBITDA | 8.87 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)13.25
EPS Next 2Y6.04%
EPS Next 3Y10.26%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.29%, WLK has a reasonable but not impressive dividend return.
WLK's Dividend Yield is comparable with the industry average which is at 3.21.
Compared to an average S&P500 Dividend Yield of 2.40, WLK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.29% |
5.2 History
On average, the dividend of WLK grows each year by 13.11%, 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)13.11%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
WLK pays out 46.43% of its income as dividend. This is a bit on the high side, but may be sustainable.
WLK's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP46.43%
EPS Next 2Y6.04%
EPS Next 3Y10.26%
WESTLAKE CORP
NYSE:WLK (4/18/2024, 6:30:05 PM)
After market: 148.94 0 (0%)148.94
+0.35 (+0.24%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap19.10B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.29% |
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)
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Min EPS beat(4)
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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)
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Min Revenue beat(4)
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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 Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.99 | ||
| Fwd PE | 20.9 | ||
| 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)13.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.26% | ||
| ROE | 4.65% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 9.82% | ||
| PM (TTM) | 3.79% | ||
| GM | 17.68% | ||
| 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 Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.37 | ||
| Quick Ratio | 1.79 | ||
| 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)
Growth
EPS 1Y (TTM)-52.33%
EPS 3Y53.93%
EPS 5Y
EPS growth Q2Q
EPS Next Y-13.93%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-20.55%
Revenue growth 3Y18.69%
Revenue growth 5Y
Revenue growth 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