Why Westlake Chemical (WLK) Stock Is Gaining Today

NEW YORK (TheStreet) -- Westlake Chemical (WLK) stock is climbing Tuesday after the company announced it is spinning off a separate MLP subsidiary responsible for ethylene production.

By early afternoon, shares had spiked 11.6% to $71.65.

The company said one of its wholly-owned subsidiaries, Westlake Chemical Partners, had filed with the SEC in relation to its proposed IPO of common units.

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"Chemical Partners is a Delaware limited partnership recently formed by Westlake to operate, acquire and develop ethylene production facilities and related assets," the company said in a statement.

The number of units on offer and their price range have not yet been determined. 

Barclays Capital and UBS Securities will act as joint book-running managers for the offering.

TheStreet Ratings team rates WESTLAKE CHEMICAL CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate WESTLAKE CHEMICAL CORP (WLK) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

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