Westlake Chemical (NYSE: WLK) and CSW Industrials (NASDAQ:CSWI) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Dividends

Westlake Chemical pays an annual dividend of $0.84 per share and has a dividend yield of 1.0%. CSW Industrials does not pay a dividend. Westlake Chemical pays out 24.0% of its earnings in the form of a dividend. CSW Industrials has increased its dividend for 13 consecutive years.

Profitability

This table compares Westlake Chemical and CSW Industrials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westlake Chemical 8.05% 16.26% 5.92%
CSW Industrials 4.54% 10.53% 7.39%

Risk & Volatility

Westlake Chemical has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500. Comparatively, CSW Industrials has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Westlake Chemical and CSW Industrials, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westlake Chemical 0 2 10 0 2.83
CSW Industrials 0 0 1 0 3.00

Westlake Chemical presently has a consensus target price of $77.22, suggesting a potential downside of 9.06%. Given Westlake Chemical’s higher possible upside, equities research analysts clearly believe Westlake Chemical is more favorable than CSW Industrials.

Valuation & Earnings

This table compares Westlake Chemical and CSW Industrials’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Westlake Chemical $6.94 billion 1.58 $1.33 billion $3.50 24.26
CSW Industrials $341.00 million 2.17 $58.23 million $0.98 47.76

Westlake Chemical has higher revenue and earnings than CSW Industrials. Westlake Chemical is trading at a lower price-to-earnings ratio than CSW Industrials, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

32.0% of Westlake Chemical shares are held by institutional investors. Comparatively, 69.4% of CSW Industrials shares are held by institutional investors. 71.7% of Westlake Chemical shares are held by company insiders. Comparatively, 2.1% of CSW Industrials shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Westlake Chemical beats CSW Industrials on 10 of the 17 factors compared between the two stocks.

Westlake Chemical Company Profile

Westlake Chemical Corporation is a global manufacturer and marketer of basic chemicals, vinyls, polymers and building products. The Company’s products include a range of chemicals, which are fundamental to various consumer and industrial markets, including flexible and rigid packaging, automotive products, coatings, water treatment, refrigerants, residential and commercial construction, as well as other durable and non-durable goods. Its segments include Olefins and Vinyls. It manufactures ethylene (through Westlake Chemical OpCo LP (OpCo)), polyethylene, styrene and associated co-products at its manufacturing facility in Lake Charles and polyethylene at its Longview facility. The Company’s products in its Vinyls segment include polyvinyl chloride (PVC), vinyl chloride monomer (VCM), ethylene dichloride (EDC), chlor-alkali (chlorine and caustic soda) and chlorinated derivative products and, through OpCo, ethylene. It also manufactures and sells building products fabricated from PVC.

CSW Industrials Company Profile

CSW Industrials, Inc. (CSWI) is a diversified industrial growth company. The Company operates through three segments: Industrial Products; Coatings, Sealants & Adhesives, and Specialty Chemicals. The Industrial Products segment consists of specialty mechanical products; fire and smoke protection products; architecturally specified building products, and storage, filtration and application equipment. The Coatings, Sealants & Adhesives segment comprises coatings and penetrants, pipe thread sealants, firestopping sealants, and caulks and adhesives/solvent cements. The Specialty Chemicals segment manufactures and supplies specialized consumables that impart or enhance properties, such as lubricity, anti-seize qualities, friction and heat control. Markets that it serves include HVAC, industrial, rail, plumbing, architecturally specified building products, energy, mining and other general industrial markets.

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