Ecolab (NYSE:ECL) & Westlake Chemical Partners (NYSE:WLKP) Critical Analysis

Ecolab (NYSE:ECL) and Westlake Chemical Partners (NYSE:WLKP) are both materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.

Volatility & Risk

Ecolab has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, Westlake Chemical Partners has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ecolab	11.99%	22.57%	8.23%
Westlake Chemical Partners	4.77%	7.55%	4.80%

Dividends

Ecolab pays an annual dividend of $2.92 per share and has a dividend yield of 1.0%. Westlake Chemical Partners pays an annual dividend of $1.88 per share and has a dividend yield of 8.7%. Ecolab pays out 39.7% of its earnings in the form of a dividend. Westlake Chemical Partners pays out 112.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ecolab has raised its dividend for 33 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Ecolab and Westlake Chemical Partners, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ecolab	0	3	18	1	2.91
Westlake Chemical Partners	0	1	1	0	2.50

Ecolab presently has a consensus target price of $328.58, suggesting a potential upside of 7.46%. Westlake Chemical Partners has a consensus target price of $26.00, suggesting a potential upside of 20.98%. Given Westlake Chemical Partners’ higher possible upside, analysts clearly believe Westlake Chemical Partners is more favorable than Ecolab.

Earnings and Valuation

This table compares Ecolab 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
Ecolab	$16.08 billion	5.33	$2.08 billion	$7.35	41.60
Westlake Chemical Partners	$1.24 billion	0.61	$48.70 million	$1.67	12.87

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

Insider and Institutional Ownership

74.9% of Ecolab shares are held by institutional investors. Comparatively, 78.3% of Westlake Chemical Partners shares are held by institutional investors. 0.5% of Ecolab shares are held by company insiders. Comparatively, 1.1% of Westlake Chemical Partners shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Ecolab beats Westlake Chemical Partners on 14 of the 18 factors compared between the two stocks.

About Ecolab

Ecolab Inc. provides water, hygiene, cleaning and infection-prevention products and services to businesses and institutions. Its solutions help customers manage water use, maintain sanitary environments and support operational efficiency. The company serves a range of industries, including food and beverage, foodservice, hospitality, healthcare, life sciences and manufacturing. Its offerings include cleaning and sanitizing products, water-treatment programs, pest-elimination services, and related monitoring and consulting support.

About Westlake Chemical Partners

Westlake Chemical Partners LP is a master limited partnership formed in 2014 to own and operate ethylene production facilities and related assets. Its operations are conducted through Westlake Chemical OpCo LP, in which the partnership holds an interest. The partnership’s assets include ethylene production facilities in Lake Charles, Louisiana, and Calvert City, Kentucky, as well as related pipeline and storage infrastructure. Ethylene is a key chemical building block used to make products such as polyethylene and other plastics.