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5 Reasons to Add Westlake Chemical to Your Portfolio Now
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Westlake Chemical Corporation (WLK - Free Report) stock looks promising at the moment. The company has seen its shares rally roughly 28% over the past six months. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make this chemical company an attractive investment option.
What’s Working in Favor of WLK?
Solid Rank & VGM Score: Westlake Chemical currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: Westlake Chemical has trounced the industry it belongs to over a year. The company’s shares have shot up around 91.8% over this period, compared with roughly 53.5% gain recorded by the industry. The company is benefiting from healthy demand for olefins and vinyls products and the Axiall acquisition.
Strong Growth Prospects: The Zacks Consensus Estimate for earnings for 2018 for Westlake Chemical is currently pegged at $8.57, reflecting an expected year-over-year growth of 56.7%. Moreover, earnings are expected to register a whopping 101.7% growth in second-quarter 2018. The company also has an expected long-term earnings per share growth of 12.2%.
Positive Earnings Surprise History: Westlake Chemical has an impressive earnings surprise history, outpacing the Zacks Consensus Estimate in three of the trailing four quarters, delivering a positive average earnings surprise of 5.9%.
Solid Q1 and Upbeat Prospects: Westlake Chemical saw its profits jump roughly two-fold year over year in the first quarter, boosted by higher selling prices for key products, increased sales volumes for caustic soda and PVC (polyvinyl chloride) resin, benefits of lower U.S. corporate tax rate and a gain from redemption of debt.
Adjusted earnings for the quarter were $2.24 per share, which topped the Zacks Consensus Estimate of $2.09.
Revenues rose roughly 11% year over year to $2,150 million, coming ahead of the Zacks Consensus Estimate of $2,101 million. Sales in the quarter benefited from higher prices for major products and increased sales volumes for caustic soda and PVC resin that more than offset reduced polyethylene sales volume.
Westlake Chemical, in its first-quarter call, noted that demand for products across its segments remains strong due to continued growth in the Americas, Europe and Asia. Moreover, it is benefiting from the investments made last year to improve its operations and reliability.
Westlake Chemical is gaining from contributions of Axiall acquisition, increased demand and higher selling prices for major products. The Axiall acquisition has diversified the company’s product portfolio and geographical operations, creating a North American leader in Olefins and Vinyls. The company expects to realize $250 million of cost reduction synergies related to the acquisition in 2018.
Westlake Chemical is also working diligently on the recently announced expansions in its Vinyls segment. This additional production capacity will help the company to address the growing needs of its global customers.
Other Stocks to Consider
Other top-ranked stocks in the basic materials space include The Chemours Company (CC - Free Report) , Huntsman Corporation (HUN - Free Report) and Methanex Corporation (MEOH - Free Report) .
Huntsman has an expected long-term earnings growth rate of 8.3% and flaunts a Zacks Rank #1. The company’s shares have moved up around 23% in a year.
Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2. Its shares have rallied roughly 59% over a year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
5 Reasons to Add Westlake Chemical to Your Portfolio Now
Westlake Chemical Corporation (WLK - Free Report) stock looks promising at the moment. The company has seen its shares rally roughly 28% over the past six months. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make this chemical company an attractive investment option.
What’s Working in Favor of WLK?
Solid Rank & VGM Score: Westlake Chemical currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: Westlake Chemical has trounced the industry it belongs to over a year. The company’s shares have shot up around 91.8% over this period, compared with roughly 53.5% gain recorded by the industry. The company is benefiting from healthy demand for olefins and vinyls products and the Axiall acquisition.
Strong Growth Prospects: The Zacks Consensus Estimate for earnings for 2018 for Westlake Chemical is currently pegged at $8.57, reflecting an expected year-over-year growth of 56.7%. Moreover, earnings are expected to register a whopping 101.7% growth in second-quarter 2018. The company also has an expected long-term earnings per share growth of 12.2%.
Positive Earnings Surprise History: Westlake Chemical has an impressive earnings surprise history, outpacing the Zacks Consensus Estimate in three of the trailing four quarters, delivering a positive average earnings surprise of 5.9%.
Solid Q1 and Upbeat Prospects: Westlake Chemical saw its profits jump roughly two-fold year over year in the first quarter, boosted by higher selling prices for key products, increased sales volumes for caustic soda and PVC (polyvinyl chloride) resin, benefits of lower U.S. corporate tax rate and a gain from redemption of debt.
Adjusted earnings for the quarter were $2.24 per share, which topped the Zacks Consensus Estimate of $2.09.
Revenues rose roughly 11% year over year to $2,150 million, coming ahead of the Zacks Consensus Estimate of $2,101 million. Sales in the quarter benefited from higher prices for major products and increased sales volumes for caustic soda and PVC resin that more than offset reduced polyethylene sales volume.
Westlake Chemical, in its first-quarter call, noted that demand for products across its segments remains strong due to continued growth in the Americas, Europe and Asia. Moreover, it is benefiting from the investments made last year to improve its operations and reliability.
Westlake Chemical is gaining from contributions of Axiall acquisition, increased demand and higher selling prices for major products. The Axiall acquisition has diversified the company’s product portfolio and geographical operations, creating a North American leader in Olefins and Vinyls. The company expects to realize $250 million of cost reduction synergies related to the acquisition in 2018.
Westlake Chemical is also working diligently on the recently announced expansions in its Vinyls segment. This additional production capacity will help the company to address the growing needs of its global customers.
Other Stocks to Consider
Other top-ranked stocks in the basic materials space include The Chemours Company (CC - Free Report) , Huntsman Corporation (HUN - Free Report) and Methanex Corporation (MEOH - Free Report) .
Chemours has an expected long-term earnings growth rate of 15.5% and flaunts a Zacks Rank #1. Its shares have gained roughly 19% over a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntsman has an expected long-term earnings growth rate of 8.3% and flaunts a Zacks Rank #1. The company’s shares have moved up around 23% in a year.
Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2. Its shares have rallied roughly 59% over a year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>