Westlake Corp (WLK) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA above its 5-year median

Westlake's EV/EBITDA of 16.3 is above its 5-year median of 6.9.

P/B below the industry

Westlake's price-to-book of 0.94 is below the Chemicals and Allied Products median of 1.51.

Trading above fair value

The share price of $63.88 is above our fair value estimate of $26.16.

Margin of safety under 20%

The price is 144% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -10.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew -0.4% over the last twelve months; the Chemicals and Allied Products median is 3.5%.

Guidance issued

The latest outlook (2026 EBITDA improvement, Feb 24, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 10.8% over the last twelve months, against 9.2% a year earlier.

Return on equity under 15%

Return on equity was -4.9% over the last twelve months and averaged 9.8% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was -2.9%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Westlake's return on equity of -4.9% is above the Chemicals and Allied Products median of -16.2%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was -3.9% over the last twelve months, against a 5-year average of 5.3%.

Net margin above the industry

Westlake's net margin of -3.9% is above the Chemicals and Allied Products median of -13.3%.

High debt

Debt is 58.5% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 59.0% five years ago to 58.5%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 16.7% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense -2.0 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 2.38 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 1.83; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Westlake paid dividends worth 3.3% of the share price over the last twelve months.

Yield below Treasuries

The 3.3% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Westlake yields 3.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Not covered by free cash flow

Dividends take 2275% of free cash flow.