Westlake Chemical Partners (NYSE: WLKP) and Gevo (NASDAQ:GEVO) are both small-cap basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.
This table compares Westlake Chemical Partners and Gevo’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Westlake Chemical Partners||4.34%||5.30%||3.39%|
Westlake Chemical Partners has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Gevo has a beta of 2.52, meaning that its stock price is 152% more volatile than the S&P 500.
Westlake Chemical Partners pays an annual dividend of $1.59 per share and has a dividend yield of 5.8%. Gevo does not pay a dividend. Westlake Chemical Partners pays out 92.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Westlake Chemical Partners has increased its dividend for 3 consecutive years.
This is a breakdown of recent ratings and recommmendations for Westlake Chemical Partners and Gevo, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westlake Chemical Partners||0||4||3||0||2.43|
Westlake Chemical Partners currently has a consensus price target of $26.30, indicating a potential downside of 4.71%. Gevo has a consensus price target of $240.00, indicating a potential upside of 6,249.21%. Given Gevo’s stronger consensus rating and higher possible upside, analysts plainly believe Gevo is more favorable than Westlake Chemical Partners.
Insider and Institutional Ownership
46.3% of Westlake Chemical Partners shares are held by institutional investors. 0.1% of Gevo shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Westlake Chemical Partners and Gevo’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Westlake Chemical Partners||$1.17 billion||0.76||$48.67 million||$1.72||16.05|
|Gevo||$27.54 million||0.63||-$24.63 million||($32.20)||-0.12|
Westlake Chemical Partners has higher revenue and earnings than Gevo. Gevo is trading at a lower price-to-earnings ratio than Westlake Chemical Partners, indicating that it is currently the more affordable of the two stocks.
Westlake Chemical Partners beats Gevo on 12 of the 17 factors compared between the two stocks.
About Westlake Chemical Partners
Westlake Chemical Partners LP operates, acquires, and develops ethylene production facilities and related assets in the United States. The company operates ethylene production facilities, which primarily convert ethane into ethylene. It also sells ethylene co-products, including propylene, crude butadiene, pyrolysis gasoline, and hydrogen directly to third parties on a spot or contract basis. Westlake Chemical Partners GP LLC serves as the general partner of the company. The company was founded in 2014 and is headquartered in Houston, Texas.
Gevo, Inc., a renewable chemicals and biofuels company, focuses on the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks in the United States. It operates through two segments, Gevo, Inc. and Gevo Development/Agri-Energy. The company engages in the research and development, and production of isobutanol; development of its proprietary biocatalysts; production and sale of biojet fuel; and retrofit process of chemicals and biofuels. It is also involved in the production of ethanol, isobutanol, and related products. In addition, the company produces and separates its renewable isobutanol through the Gevo Integrated Fermentation Technology platform. The company was formerly known as Methanotech, Inc. and changed its name to Gevo, Inc. in March 2006. Gevo, Inc. was founded in 2005 and is headquartered in Englewood, Colorado.
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