Westlake Chemical Corp

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WLK : NYSE : Basic Materials
$49.59 -0.71 | -1.41%
Today's Range: 49.54 - 50.50
Avg. Daily Volume: 1,027,200
09/26/16 - 4:02 PM ET

Financial Analysis


WESTLAKE CHEMICAL CORP's gross profit margin for the second quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. WESTLAKE CHEMICAL CORP is extremely liquid. Currently, the Quick Ratio is 2.75 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 10.11% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)1086.061185.0
EBITDA ($mil)237.87346.64
EBIT ($mil)179.94295.37
Net Income ($mil)111.12205.1


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1123.021026.57
Total Assets ($mil)5920.565411.01
Total Debt ($mil)758.45764.06
Equity ($mil)3439.163123.39


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin27.5634.13
EBITDA Margin21.929.25
Operating Margin16.5724.93
Sales Turnover0.720.86
Return on Assets8.9312.98
Return on Equity15.3722.49
Debt Q2 FY16 Q2 FY15
Current Ratio3.534.05
Debt/Capital0.180.2
Interest Expense5.928.96
Interest Coverage30.4232.97


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)128.78132.03
Div / share0.180.17
EPS0.851.54
Book value / share26.723.66
Institutional Own % n/a n/a
Avg Daily Volume1039297.01091309.0

Valuation


BUY. WESTLAKE CHEMICAL CORP's P/E ratio indicates a significant discount compared to an average of 24.75 for the Chemicals industry and a significant discount compared to the S&P 500 average of 25.19. To use another comparison, its price-to-book ratio of 1.90 indicates a discount versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 5.71. The price-to-sales ratio is below the S&P 500 average and is well below 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 12.64 Peers 24.75   WLK 6.45 Peers 15.78

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 12.25 Peers 20.26   WLK NM Peers 1.89

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.

 

Neutral. 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's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WLK 1.90 Peers 5.71   WLK -23.77 Peers 93.43

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 1.54 Peers 2.31   WLK -9.45 Peers -7.33

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.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

WLK significantly trails its peers on the basis of sales growth

 

 

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