Head to Head Review: Westlake Chemical (WLK) and W. R. Grace and (GRA)

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

Earnings & Valuation

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This table compares Westlake Chemical and W. R. Grace and’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Westlake Chemical $8.04 billion 1.79 $1.30 billion $5.47 20.32
W. R. Grace and $1.72 billion 2.41 $11.20 million $3.40 18.01

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

Insider & Institutional Ownership

30.3% of Westlake Chemical shares are owned by institutional investors. Comparatively, 86.4% of W. R. Grace and shares are owned by institutional investors. 72.5% of Westlake Chemical shares are owned by company insiders. Comparatively, 1.3% of W. R. Grace and shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Westlake Chemical and W. R. Grace and, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westlake Chemical 1 5 9 0 2.53
W. R. Grace and 0 3 8 0 2.73

Westlake Chemical presently has a consensus target price of $113.69, suggesting a potential upside of 2.29%. W. R. Grace and has a consensus target price of $80.80, suggesting a potential upside of 31.96%. Given W. R. Grace and’s stronger consensus rating and higher probable upside, analysts plainly believe W. R. Grace and is more favorable than Westlake Chemical.

Volatility and Risk

Westlake Chemical has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, W. R. Grace and has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.

Dividends

Westlake Chemical pays an annual dividend of $0.84 per share and has a dividend yield of 0.8%. W. R. Grace and pays an annual dividend of $0.96 per share and has a dividend yield of 1.6%. Westlake Chemical pays out 15.4% of its earnings in the form of a dividend. W. R. Grace and pays out 28.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Westlake Chemical has raised its dividend for 14 consecutive years.

Profitability

This table compares Westlake Chemical and W. R. Grace and’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westlake Chemical 16.22% 16.48% 6.66%
W. R. Grace and 0.65% 63.39% 7.87%

Summary

Westlake Chemical beats W. R. Grace and on 10 of the 17 factors compared between the two stocks.

About Westlake Chemical

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.

About W. R. Grace and

W. R. Grace & Co. produces and sells specialty chemicals and materials worldwide. It operates through two segments, Grace Catalysts Technologies and Grace Materials Technologies. The Grace Catalysts Technologies segment offers fluid catalytic cracking (FCC) catalysts for the production of transportation fuels, such as gasoline and diesel fuels, and other petroleum-based products; FCC additives; and methanol-to-olefins catalysts for the conversion of methanol into petrochemical feeds, including ethylene and propylene. This segment also provides hydro processing catalysts used in process reactors to upgrade heavy oils into lighter products; polyolefin catalysts and catalyst supports for the production of polypropylene and polyethylene thermoplastic resins; and chemical catalysts used in various industrial, environmental, and consumer applications, as well as gas-phase polypropylene process technology to manufacture polypropylene products. The Grace Materials Technologies segment offers silica-based and silica-alumina-based materials for use in coatings, consumer, industrial, and pharmaceutical applications. W. R. Grace & Co. was founded in 1854 and is headquartered in Columbia, Maryland.

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