Assessing the Dividend Sustainability and Growth Prospects of Westlake Corp
Westlake Corp (WLK, Financial) recently announced a dividend of $0.5 per share, payable on 2024-03-14, with the ex-dividend date set for 2024-02-27. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Westlake Corp's dividend performance and assess its sustainability.
What Does Westlake Corp Do?
Westlake Corp is a manufacturer and supplier of chemicals, polymers and building products. Its Performance and Essential Materials segment offers a wide range of essential building blocks for making products utilized in everyday living, including olefins, vinyl chemicals, polyethylene, and epoxies. Its Housing and Infrastructure Products segment produces key finished goods for building products, pipe and fittings, and global compounds businesses.
A Glimpse at Westlake Corp's Dividend History
Westlake Corp has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis.
Westlake Corp has increased its dividend each year since 2004. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 20 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Westlake Corp's Dividend Yield and Growth
As of today, Westlake Corp currently has a 12-month trailing dividend yield of 1.25% and a 12-month forward dividend yield of 1.36%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Westlake Corp's annual dividend growth rate was 17.20%. Extended to a five-year horizon, this rate decreased to 11.80% per year. And over the past decade, Westlake Corp's annual dividends per share growth rate stands at an impressive 12.30%.
Based on Westlake Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Westlake Corp stock as of today is approximately 2.18%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Westlake Corp's dividend payout ratio is 0.24.
Westlake Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Westlake Corp's profitability 9 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Westlake Corp's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Westlake Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Westlake Corp's revenue has increased by approximately 18.50% per year on average, a rate that outperforms approximately 74.17% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Westlake Corp's earnings increased by approximately 33.90% per year on average, a rate that outperforms approximately 73.35% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 17.90%, which outperforms approximately 65.9% of global competitors.
Concluding Thoughts on Westlake Corp's Dividend Profile
Considering Westlake Corp's consistent history of dividend payments, robust growth rates, and a prudent payout ratio, the company presents a compelling case for dividend investors. With its strong profitability rank and positive growth metrics, Westlake Corp (WLK, Financial) appears to be in a favorable position to sustain and potentially increase its dividend payments in the future. Investors seeking to diversify their portfolio with a chemical industry stock that offers a reliable dividend might find Westlake Corp an attractive option.
For those interested in further exploring dividend opportunities, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
