Critical Review: AdvanSix (NYSE:ASIX) & Westlake Chemical Partners (NYSE:WLKP)

Westlake Chemical Partners (NYSE:WLKP) and AdvanSix (NYSE:ASIX) are both small-cap basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Dividends

Westlake Chemical Partners pays an annual dividend of $1.89 per share and has a dividend yield of 8.3%. AdvanSix pays an annual dividend of $0.64 per share and has a dividend yield of 2.8%. Westlake Chemical Partners pays out 115.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AdvanSix pays out 173.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AdvanSix has increased its dividend for 2 consecutive years. Westlake Chemical Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Westlake Chemical Partners has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, AdvanSix has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Earnings and Valuation

This table compares Westlake Chemical Partners and AdvanSix”s top-line 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	0.69	$48.70 million	$1.64	13.86
AdvanSix	$1.52 billion	0.40	$49.29 million	$0.37	61.14

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

Insider and Institutional Ownership

78.3% of Westlake Chemical Partners shares are owned by institutional investors. Comparatively, 86.4% of AdvanSix shares are owned by institutional investors. 1.1% of Westlake Chemical Partners shares are owned by insiders. Comparatively, 5.0% of AdvanSix shares are owned 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Westlake Chemical Partners	4.69%	7.15%	4.57%
AdvanSix	0.67%	2.18%	1.05%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Westlake Chemical Partners and AdvanSix, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westlake Chemical Partners	0	1	1	0	2.50
AdvanSix	1	2	0	0	1.67

AdvanSix has a consensus price target of $22.50, suggesting a potential downside of 0.53%. Given AdvanSix’s higher probable upside, analysts clearly believe AdvanSix is more favorable than Westlake Chemical Partners.

Summary

Westlake Chemical Partners beats AdvanSix on 9 of the 17 factors compared between the two stocks.

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.

About AdvanSix

AdvanSix Inc. engages in the manufacture and sale of polymer resins in the United States and internationally. It offers Nylon 6, a polymer resin, which is a synthetic material used to produce fibers, filaments, engineered plastics, and films. The company also provides caprolactam to manufacture polymer resins; ammonium sulfate fertilizers to distributors, farm cooperatives, and retailers; and acetone that are used in the production of adhesives, paints, coatings, solvents, herbicides, and engineered plastic resins, as well as other intermediate chemicals, including phenol, monoisopropylamine, dipropylamine, monoallylamine, alpha-methylstyrene, cyclohexanone, methyl ethyl ketoxime, acetaldehyde oxime, 2-pentanone oxime, cyclohexanol, sulfuric acid, ammonia, and carbon dioxide. It offers its products under the Aegis, Capran, Sulf-N, Nadone, Naxol, and EZ-Blox brands. The company sells its products directly, as well as through distributors. AdvanSix Inc. was incorporated in 2016 and is headquartered in Parsippany, New Jersey.