Financial Review: Element Solutions (NYSE:ESI) & Westlake Chemical Partners (NYSE:WLKP)

Element Solutions (NYSE:ESI) and Westlake Chemical Partners (NYSE:WLKP) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.

Profitability

This table compares Element Solutions and Westlake Chemical Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Element Solutions	9.58%	14.01%	7.28%
Westlake Chemical Partners	4.34%	6.00%	3.75%

Analyst Ratings

This is a summary of current recommendations for Element Solutions and Westlake Chemical Partners, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Element Solutions	0	2	7	1	2.90
Westlake Chemical Partners	0	2	0	0	2.00

Element Solutions presently has a consensus target price of $30.88, indicating a potential upside of 14.27%. Given Element Solutions’ stronger consensus rating and higher possible upside, research analysts clearly believe Element Solutions is more favorable than Westlake Chemical Partners.

Volatility & Risk

Element Solutions has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Westlake Chemical Partners has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Insider and Institutional Ownership

92.3% of Element Solutions shares are owned by institutional investors. Comparatively, 78.3% of Westlake Chemical Partners shares are owned by institutional investors. 6.9% of Element Solutions shares are owned by company insiders. Comparatively, 1.1% of Westlake Chemical Partners shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Element Solutions and Westlake Chemical Partners”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Element Solutions	$2.50 billion	2.62	$244.20 million	$0.99	27.29
Westlake Chemical Partners	$1.14 billion	0.58	$62.39 million	$1.40	13.33

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

Dividends

Element Solutions pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Westlake Chemical Partners pays an annual dividend of $1.89 per share and has a dividend yield of 10.1%. Element Solutions pays out 32.3% of its earnings in the form of a dividend. Westlake Chemical Partners pays out 135.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Element Solutions beats Westlake Chemical Partners on 15 of the 17 factors compared between the two stocks.

About Element Solutions

Element Solutions Inc operates as a specialty chemicals company in the United States, China, and internationally. The company operates in two segments, Electronics, and Industrial & Specialty. The Electronics segment researches, formulates, and sells specialty chemicals and materials for various types of electronics hardware products. This segment also supplies surface mount technologies, fluxes, thermal management material, coatings, and other attachment materials; chemical formulations to the electronics industry; and advanced copper interconnects, die attachment, sintered silver material, adhesives, wafer bump processes, and photomask technologies for semiconductor industry. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.

About Westlake Chemical Partners

Westlake Chemical Partners LP acquires, develops, and operates ethylene production facilities and related assets in the United States. The company’s ethylene production facilities primarily convert ethane into ethylene. It also sells ethylene co-products, such as propylene, crude butadiene, pyrolysis gasoline, and hydrogen directly to third parties on either a spot or contract basis. Westlake Chemical Partners GP LLC serves as the general partner of the company. Westlake Chemical Partners LP was founded in 1991 and is headquartered in Houston, Texas.