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Relative valuation derived from Materials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
39.7%
Sector: 3.3%
Dividend Analysis audit
HIGH YIELD
8.98%
Trailing Yield
$8.98
Per $100 Invested
Attractive yield supported by strong profitability.
Est. Payout Ratio
22%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, Westlake Chemical Partners LP (WLKP) receives a "Hold" rating with a composite score of 52.1/100, ranked #498 out of 4446 stocks. Key factor scores: Quality 50/100, Value 80/100, Momentum 46/100. This is quantitative analysis only — not investment advice.
Westlake Chemical Partners LP (WLKP) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does Westlake Chemical Partners LP Do?
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, including 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. The company was incorporated in 2014 and is headquartered in Houston, Texas. Westlake Chemical Partners LP (WLKP) is classified as a small-cap stock in the Materials sector, specifically within the Chemicals industry. The company is led by CEO Albert Y. Chao and employs approximately 150 people, headquartered in Houston, Texas. With a market capitalization of $789M, WLKP is one of the notable companies in the Materials sector.
Westlake Chemical Partners LP (WLKP) Stock Rating — Hold (April 2026)
As of April 2026, Westlake Chemical Partners LP receives a Hold rating with a composite score of 52.1/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.WLKP ranks #498 out of 4,446 stocks in our coverage universe. Within the Materials sector, Westlake Chemical Partners LP ranks #28 of 284 stocks, placing it in the top 10% of its Materials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
WLKP Stock Price and 52-Week Range
Westlake Chemical Partners LP (WLKP) currently trades at $22.66. The stock lost $0.02 (0.1%) in the most recent trading session. The 52-week high for WLKP is $23.82, which means the stock is currently trading -4.9% from its annual peak. The 52-week low is $17.75, putting the stock 27.7% above its annual trough. Recent trading volume was 19K shares, suggesting relatively thin trading activity.
Is WLKP Overvalued or Undervalued? — Valuation Analysis
Westlake Chemical Partners LP (WLKP) carries a value factor score of 80/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 2.48x, compared to the Materials sector average of 26.50x — a discount of 91%. The price-to-book ratio stands at 0.98x, versus the sector average of 2.83x. The price-to-sales ratio is 0.70x, compared to 0.74x for the average Materials stock. On an enterprise value basis, WLKP trades at 2.33x EV/EBITDA, versus 6.01x for the sector.
Based on these multiples, Westlake Chemical Partners LP appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
Westlake Chemical Partners LP Profitability — ROE, Margins, and Quality Score
Westlake Chemical Partners LP (WLKP) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 39.7%, compared to the Materials sector average of 3.3%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 25.3% versus the sector average of 0.6%.
On a margin basis, Westlake Chemical Partners LP reports gross margins of 32.5%, compared to 29.8% for the sector. The operating margin is 29.9% (sector: 6.0%). Net profit margin stands at 28.0%, versus 3.0% for the average Materials stock. Revenue growth is running at 8.7% on a trailing basis, compared to 1.8% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
WLKP Debt, Balance Sheet, and Financial Health
Westlake Chemical Partners LP has a debt-to-equity ratio of 57.0%, compared to the Materials sector average of 41.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 2.80x, indicating strong short-term liquidity. Cash and equivalents stand at $38M.
WLKP has a beta of 0.23, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for Westlake Chemical Partners LP is 90/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
Westlake Chemical Partners LP Revenue and Earnings History — Quarterly Trend
In TTM 2026, Westlake Chemical Partners LP reported revenue of $1.12B. Net income for the quarter was $318M. Gross margin was 32.5%. Operating income came in at $340M.
In FY 2025, Westlake Chemical Partners LP reported revenue of $1.17B. Net income for the quarter was $299M. Gross margin was 29.8%. Revenue grew 2.7% year-over-year compared to FY 2024. Operating income came in at $320M.
In Q3 2025, Westlake Chemical Partners LP reported revenue of $309M. Net income for the quarter was $86M. Gross margin was 32.2%. Revenue grew 11.5% year-over-year compared to Q3 2024. Operating income came in at $92M.
In Q2 2025, Westlake Chemical Partners LP reported revenue of $297M. Net income for the quarter was $86M. Gross margin was 32.8%. Revenue grew 4.6% year-over-year compared to Q2 2024. Operating income came in at $91M.
Over the past 8 quarters, Westlake Chemical Partners LP has demonstrated a growth trajectory, with revenue expanding from $284M to $1.12B. Investors analyzing WLKP stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
WLKP Dividend Yield and Income Analysis
Westlake Chemical Partners LP (WLKP) currently pays a dividend yield of 9.0%. At this yield, a $10,000 investment in WLKP stock would generate approximately $$898.00 in annual dividend income. This compares to the Materials sector average dividend yield of 0.5%, meaning WLKP offers above-average income for its sector. With a net margin of 28.0%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
WLKP Momentum and Technical Analysis Profile
Westlake Chemical Partners LP (WLKP) has a momentum factor score of 46/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 30/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 16/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
WLKP vs Competitors — Materials Sector Ranking and Peer Comparison
Comparing WLKP against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full WLKP vs S&P 500 (SPY) comparison to assess how Westlake Chemical Partners LP stacks up against the broader market across all factor dimensions.
WLKP Next Earnings Date
No upcoming earnings date has been announced for Westlake Chemical Partners LP (WLKP) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy WLKP? — Investment Thesis Summary
Westlake Chemical Partners LP presents a balanced picture with arguments on both sides. The value score of 80/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 90/100) reduces downside risk.
In summary, Westlake Chemical Partners LP (WLKP) earns a Hold rating with a composite score of 52.1/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on WLKP stock.
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Institutional Research Dossier
Westlake Chemical Partners LP (WLKP) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Westlake Chemical Partners LP (WLKP) receives a Hold rating, driven by its attractive valuation metrics offset by concerns regarding long-term growth prospects and dependence on its parent company. While the company exhibits strong profitability and stability, its limited investment in future growth and reliance on a single operational segment present challenges. The current valuation appears undemanding, but investors should carefully consider the risks associated with its concentrated business model and potential conflicts of interest arising from its relationship with Westlake Chemical Corporation.
WLKP's impressive profitability metrics, such as its high ROE and net margin, are noteworthy. However, the partnership's growth prospects are constrained by its limited diversification and capital allocation strategy. The Hold rating reflects a balanced view, acknowledging the current value proposition while remaining cautious about the company's ability to sustain its performance in the long run. Investors should closely monitor the company's strategic initiatives and its relationship with its parent company to assess its future prospects.
Business Strategy & Overview
Westlake Chemical Partners LP operates as a master limited partnership (MLP) focused on acquiring, developing, and operating ethylene production facilities and related assets. The company's primary business involves converting ethane into ethylene, a crucial building block for various plastics and chemical products. WLKP generates revenue by selling ethylene and its co-products, such as propylene, crude butadiene, pyrolysis gasoline, and hydrogen, to third parties through spot market transactions and long-term contracts. The company's general partner, Westlake Chemical Partners GP LLC, manages its operations and strategic direction.
WLKP's business strategy centers on maintaining operational efficiency and maximizing the utilization of its existing assets. The company benefits from a stable demand for ethylene, driven by the growth in the plastics and chemical industries. However, its reliance on a single operational segment exposes it to fluctuations in ethylene prices and feedstock costs. The company's strategic positioning is closely tied to its relationship with Westlake Chemical Corporation, its parent company, which provides operational support and serves as a significant customer.
The company's growth strategy is primarily focused on organic expansion and strategic acquisitions of ethylene production facilities. However, its investment in future growth appears limited, as indicated by its relatively low Investment score in our proprietary quant model. WLKP's capital allocation decisions are influenced by its MLP structure, which prioritizes distributions to unitholders over reinvestment in the business. This approach may constrain its ability to pursue significant growth opportunities and diversify its revenue streams.
The industry context for WLKP is characterized by intense competition and cyclical demand patterns. The ethylene market is influenced by global economic conditions, feedstock availability, and capacity expansions. WLKP competes with other major chemical companies that have larger scale and more diversified product portfolios. The company's ability to maintain its competitive position depends on its cost efficiency, operational reliability, and access to ethane feedstock. The company's reliance on its parent company for operational support and feedstock supply also presents both opportunities and risks.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
8.7%
Sector: 1.8%
+397% VS SCTR
Economic Moat Analysis
Westlake Chemical Partners LP possesses a narrow economic moat, primarily derived from its cost advantages and strategic asset location. The company's ethylene production facilities benefit from access to abundant and relatively low-cost ethane feedstock from shale gas formations in the United States. This cost advantage allows WLKP to compete effectively in the ethylene market and generate attractive profit margins. However, the company's moat is not wide due to the commoditized nature of ethylene and the presence of numerous competitors with similar access to feedstock.
The company's strategic asset location in the Gulf Coast region provides access to a well-developed infrastructure for transporting and storing ethylene and its co-products. This infrastructure reduces transportation costs and enhances the company's operational efficiency. However, the Gulf Coast region is also prone to hurricanes and other natural disasters, which could disrupt the company's operations and increase its costs. The company's reliance on a single operational segment also limits its ability to diversify its revenue streams and mitigate the impact of adverse events.
WLKP does not benefit from significant network effects or switching costs. Ethylene is a commodity product, and customers can easily switch between suppliers based on price and availability. The company's intangible assets, such as patents and trademarks, are not material to its competitive advantage. The company's efficient scale is limited by the size of its ethylene production facilities and the presence of larger competitors with greater economies of scale.
The company's relationship with Westlake Chemical Corporation provides both advantages and disadvantages. On the one hand, WLKP benefits from its parent company's operational expertise, financial resources, and access to feedstock. On the other hand, WLKP's dependence on its parent company creates potential conflicts of interest and limits its strategic flexibility. The company's general partner, Westlake Chemical Partners GP LLC, is controlled by Westlake Chemical Corporation, which could prioritize the interests of its parent company over those of WLKP's unitholders.
The narrow moat is further threatened by the potential for increased competition and technological advancements in ethylene production. New technologies, such as bio-based ethylene production, could disrupt the traditional ethylene market and erode WLKP's cost advantages. The company's ability to maintain its competitive position depends on its ability to adapt to changing market conditions and invest in new technologies.
Financial Health & Profitability
Westlake Chemical Partners LP exhibits a strong financial profile, characterized by robust profitability, solid cash flow generation, and a healthy balance sheet. The company's revenue has demonstrated consistent growth, with a TTM revenue of $1.17 billion, compared to $1.14 billion in FY2024 and $1.19 billion in FY2023. This growth reflects the stable demand for ethylene and the company's ability to maintain high utilization rates at its production facilities. The company's gross margin and operating margin are significantly higher than the sector averages, indicating its cost efficiency and operational excellence.
WLKP's profitability metrics are particularly impressive, with a TTM net income of $298.58 million and a return on equity (ROE) of 39.7%, far exceeding the sector average of 2.7%. The company's net margin of 28.0% is also significantly higher than the sector average of 3.0%, demonstrating its ability to generate substantial profits from its operations. The company's EBITDA of $319.58 million and free cash flow (FCF) of $227.34 million further highlight its strong cash flow generation capabilities.
The company's balance sheet is relatively healthy, with a current ratio of 2.80, indicating its ability to meet its short-term obligations. The company's total cash balance of $37.94 million provides a buffer against unexpected expenses and allows it to pursue strategic opportunities. While the provided data indicates 'Total Debt: N/A', the sector comparison shows a D/E ratio of 57.00, which seems high. This discrepancy needs further investigation to determine the actual debt level of the company.
Analyzing the quarterly financial history reveals some fluctuations in the company's performance. While revenue has remained relatively stable, gross margin and operating margin have varied from quarter to quarter. For example, the gross margin decreased from 36.9% in FY2024 to 29.8% in FY2025. Similarly, the operating margin decreased from 34.4% in FY2024 to 27.4% in FY2025. These fluctuations may be due to changes in ethylene prices, feedstock costs, or operational factors. Investors should closely monitor these trends to assess the company's ability to maintain its profitability in the long run.
Overall, Westlake Chemical Partners LP's financial health is strong, supported by its robust profitability, solid cash flow generation, and healthy balance sheet. However, the fluctuations in its quarterly performance and the potential debt level warrant further investigation. Investors should also consider the company's limited investment in future growth and its dependence on its parent company when assessing its long-term financial prospects.
Valuation Assessment
Westlake Chemical Partners LP's valuation metrics suggest that the stock is undervalued relative to its peers and the broader market. The company's price-to-earnings (P/E) ratio of 2.5x is significantly lower than the sector average of 26.1x, indicating that investors are not fully recognizing the company's earnings potential. Similarly, the company's enterprise value-to-EBITDA (EV/EBITDA) ratio of 0.6x is substantially lower than the sector average of 5.2x, suggesting that the company's assets are undervalued.
The company's low valuation multiples may be due to several factors, including its MLP structure, its limited growth prospects, and its dependence on its parent company. MLPs typically trade at lower multiples than traditional corporations due to their complex tax structure and their focus on distributions to unitholders. The company's limited investment in future growth may also be weighing on its valuation, as investors may be concerned about its ability to sustain its performance in the long run. The company's dependence on its parent company may also be a factor, as investors may be concerned about potential conflicts of interest and the company's lack of strategic flexibility.
Despite its low valuation multiples, Westlake Chemical Partners LP offers an attractive free cash flow (FCF) yield. While the exact FCF yield cannot be calculated without the market cap, the provided data shows a TTM FCF of $227.34 million and a market cap of $783.16 million. This translates to a FCF yield of approximately 29%, which is significantly higher than the average FCF yield for the sector. This high FCF yield suggests that the company is generating substantial cash flow relative to its market value, which could support future distributions to unitholders.
However, investors should be cautious about relying solely on valuation multiples when assessing Westlake Chemical Partners LP. The company's unique characteristics and its relationship with its parent company make it difficult to compare its valuation to those of its peers. Investors should also consider the company's growth prospects, its financial health, and its risk profile when making investment decisions. The Hold rating reflects a balanced view, acknowledging the company's attractive valuation while remaining cautious about its long-term prospects.
A discounted cash flow (DCF) analysis would provide a more comprehensive valuation assessment, but is not possible with the provided data. Such an analysis would require assumptions about the company's future revenue growth, profit margins, and capital expenditures. Given the company's limited growth prospects and its dependence on its parent company, a conservative growth rate should be used in the DCF analysis.
Risk & Uncertainty
Westlake Chemical Partners LP faces several specific, idiosyncratic risks that could negatively impact its business and financial performance. One of the most significant risks is its dependence on Westlake Chemical Corporation, its parent company. WLKP relies on Westlake Chemical for operational support, feedstock supply, and a significant portion of its revenue. Any disruption to Westlake Chemical's operations or a change in its relationship with WLKP could have a material adverse effect on WLKP's business.
Another significant risk is the volatility of ethylene prices and feedstock costs. Ethylene is a commodity product, and its price is subject to fluctuations based on supply and demand factors. Similarly, the cost of ethane feedstock can vary depending on market conditions and transportation costs. Changes in ethylene prices or feedstock costs could significantly impact WLKP's profit margins and cash flow. The company attempts to mitigate this risk through long-term contracts and hedging strategies, but these measures may not be fully effective.
The company's concentration in a single operational segment, ethylene production, also presents a risk. A downturn in the ethylene market or a disruption to the company's ethylene production facilities could have a significant impact on its revenue and earnings. The company's limited diversification makes it more vulnerable to adverse events than its more diversified competitors. The company could mitigate this risk by expanding into other chemical products or geographic markets, but such expansion would require significant capital investment and may not be feasible.
Regulatory risks also pose a threat to WLKP's business. The chemical industry is subject to extensive environmental, health, and safety regulations. Changes in these regulations could increase the company's compliance costs and limit its ability to operate its facilities. The company is also subject to regulations related to the transportation and storage of hazardous materials. A violation of these regulations could result in significant fines and penalties.
Finally, the company's MLP structure presents certain risks to investors. MLPs are subject to complex tax rules, and changes in these rules could negatively impact the company's financial performance and its distributions to unitholders. The company's general partner, Westlake Chemical Partners GP LLC, has the power to make decisions that could benefit its parent company, Westlake Chemical Corporation, at the expense of WLKP's unitholders. This potential conflict of interest could lead to suboptimal capital allocation decisions and reduced distributions to unitholders.
Bulls Say / Bears Say
The Bull Case
BULL VIEWWestlake Chemical Partners LP is significantly undervalued compared to its peers, offering investors a compelling entry point with a high free cash flow yield.
BULL VIEWThe company's stable operations and strong relationship with Westlake Chemical Corporation provide a predictable revenue stream and mitigate operational risks.
The Bear Case
BEAR VIEWWestlake Chemical Partners LP's dependence on its parent company and limited diversification expose it to significant risks and constrain its growth potential.
BEAR VIEWThe company's MLP structure and focus on distributions limit its ability to reinvest in the business and adapt to changing market conditions.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score WLKP and 4,400+ other equities.
Westlake Chemical Partners LP exhibits a 56% valuation discount relative to institutional benchmarks. This represents a constructive entry window based on current multiples.
Return on Assets
Efficiency of asset utilization
25.3%
Sector: 0.6%
Gross Margin
Pricing power and cost efficiency
32.5%
Sector: 29.8%
Operating Margin
Core business profitability
29.9%
Sector: 6.0%
Net Margin
Bottom-line profitability
28.0%
Sector: 3.0%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.49%
Yield Delta+1733%
Income Projection audit
A $10,000 investment would generate approximately $898 annually in dividends at the current trailing rate.
