Westlake Chemical Corp.

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WLK : NYSE : Process Industries
$111.14 up 2.7 | 2.4%
Today's Range: 108.46 - 111.9
Avg. Daily Volume: 746300.0
02/22/18 - 3:59 PM ET

Financial Analysis


WESTLAKE CHEMICAL CORP's gross profit margin for the third quarter of its fiscal year 2017 has increased when compared to the same period a year ago. The company has grown sales and net income significantly, outpacing the average growth rates of competitors within its industry. WESTLAKE CHEMICAL CORP has strong liquidity. Currently, the Quick Ratio is 1.56 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 17.67% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q3 FY17 Q3 FY16
Net Sales ($mil)2108.891279.03
EBITDA ($mil)488.57240.55
EBIT ($mil)372.41165.4
Net Income ($mil)210.8365.66


Balance Sheet Q3 FY17 Q3 FY16
Cash & Equiv. ($mil)686.86549.84
Total Assets ($mil)11244.1310897.05
Total Debt ($mil)3349.43830.28
Equity ($mil)4068.773457.73


Profitability Q3 FY17 Q3 FY16
Gross Profit Margin29.1224.49
EBITDA Margin23.1618.8
Operating Margin17.6612.93
Sales Turnover0.690.4
Return on Assets5.343.77
Return on Equity14.7611.88
Debt Q3 FY17 Q3 FY16
Current Ratio2.312.01
Debt/Capital0.450.53
Interest Expense40.0424.37
Interest Coverage9.36.79


Share Data Q3 FY17 Q3 FY16
Shares outstanding (mil)129.1128.9
Div / share0.210.19
EPS1.610.51
Book value / share31.5226.83
Institutional Own % n/a n/a
Avg Daily Volume789529.0832810.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 34.67 for the Chemicals industry and a value on par with the S&P 500 average of 25.51. To use another comparison, its price-to-book ratio of 3.47 indicates valuation on par with the S&P 500 average of 3.26 and a discount versus the industry average of 4.51. 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 23.75 Peers 34.67   WLK 11.26 Peers 16.66

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 14.70 Peers 19.86   WLK 0.29 Peers 0.81

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

WLK is trading at a valuation on par with 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 3.47 Peers 4.51   WLK 46.96 Peers 363.73

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 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 1.82 Peers 2.60   WLK 79.47 Peers 16.33

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.

 

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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