Westlake Chemical Corp

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WLK : NYSE : Basic Materials
$62.34 | %
Today's Range: 62.28 - 63.3
Avg. Daily Volume: 881000.0
06/23/17 - 4:09 PM ET

Financial Analysis


WESTLAKE CHEMICAL CORP's gross profit margin for the first quarter of its fiscal year 2017 has decreased when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. WESTLAKE CHEMICAL CORP has average liquidity. Currently, the Quick Ratio is 1.47 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 7.41% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)1942.62975.19
EBITDA ($mil)357.58257.35
EBIT ($mil)243.49201.31
Net Income ($mil)138.19123.13


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)381.921139.98
Total Assets ($mil)10724.835724.4
Total Debt ($mil)3602.83759.33
Equity ($mil)3659.23406.53


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin24.7731.68
EBITDA Margin18.426.38
Operating Margin12.5320.64
Sales Turnover0.560.76
Return on Assets3.8510.87
Return on Equity11.3118.28
Debt Q1 FY17 Q1 FY16
Current Ratio2.394.33
Debt/Capital0.50.18
Interest Expense39.786.69
Interest Coverage6.1230.11


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)129.04130.29
Div / share0.190.18
EPS1.060.94
Book value / share28.3626.15
Institutional Own % n/a n/a
Avg Daily Volume874239.0852127.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 30.71 for the Chemicals industry and a discount compared to the S&P 500 average of 25.73. To use another comparison, its price-to-book ratio of 2.20 indicates a discount versus the S&P 500 average of 3.08 and a significant discount versus the industry average of 5.59. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, WESTLAKE CHEMICAL CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WLK 19.66 Peers 30.71   WLK 9.33 Peers 16.52

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

WLK is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

WLK is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
WLK 13.30 Peers 20.26   WLK 0.42 Peers 4.43

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

WLK is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

WLK trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WLK 2.20 Peers 5.59   WLK -32.35 Peers 7.08

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

WLK is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, WLK is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WLK 1.33 Peers 2.43   WLK 39.39 Peers 3.46

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

WLK is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

WLK has a sales growth rate that significantly exceeds its peers.

 

 

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