Westlake Chemical Partners LP Has Good Chemistry
Every New York stock exchange trading day I'm posting a daily dividend stock or fund review. I'll share the three chief qualities of just one equity or fund that could be selected for a dividend stock portfolio I've named the Safari to Sweet Success.
This week's slot in the Safari portfolio is reserved for the basic materials sector.
That sector includes thirteen industries all related to mining or making commodities. Industries include: agricultural inputs, aluminum; building materials, chemicals, coal, copper, gold, industrial metals, lumber & wood, paper, silver, specialty chemicals, and steel.
Today we're reviewing a chemical firm that operates, acquires and develops facilities for the processing of natural gas liquids as well as other such assets. The company name is Westlake Chemical Partners LP. It's trading ticker symbol is WLKP.
The company operates ethylene production facilities, which convert ethane into ethylene. It also sells ethylene co-products, including propylene, crude butadiene, pyrolysis gasoline, and hydrogen directly to third parties on a spot or contract basis. Westlake Chemical Partners GP LLC serves as the general partner of the company. The limited partnership was founded in 2014 and is headquartered in Houston, Texas.
I use three keys to measure dividend equities or funds like Westlake Chemical Partners LP. (WLKP):
(1) Price
(2) Dividends
(3) Returns
WLKP Price
Westlake Chemical Partners LP's price at Friday's market close was $24.95 per share. The company has positive momentum. Just a year ago its price was $21.55. That's a gain of $3.40 in the past year. Can SCM do as well in the coming year?If it does, its price will increase to $28.35, or 13.63%.
WLKP Dividends
The company's most recent monthly dividend was $0.3756 declared and paid in November.The dividend equates to $0.3756 x 4 or $1.50 annually.
At last Friday's closing price of $24.95 per share, the annual yield from $1.50 showed as 6%.
Are Gains Ahead For WLKP?
Adding the dividend of $1.50 to the $3.40 potential upside from a repeat of 2017's price performance projects a possible $4.90 gross gain.
Note that six analysts follow WLKP. Four say buy,and two say hold. The six analysts set a target price at $25.42 next year or $2.93 less than the year-over-year calculation of $28.35
Calculating potential net gains for WLKP depends on how many shares are bought. A $1,000.00 budget amount used to buy shares at WLKP's last $24.95 closing price would let us purchase 40 shares.
Those 40 shares will be hit with a broker fee of about $5 at purchase and another $5 at sale (for a total of $10 to get any gains). Each share then has a brokerage cost of about $0.25.
Plotting Returns For WLKP
Subtracting the $0.25 brokerage cost from the maximum $4.90 gross gain shows a net gain to 2018 of $4.65
X 40 shares
= $186.00
or about a 19% net on our $998.00 investment.
Going with the six brokers upside estimate of $1.97 gross gain minus the $0.25 broker fee get us to a net gain of $0.82 X 40 shares = $32.80 or 3.3%
Therefore, Westlake Chemical Partners LP (whose ticker symbol is WLKP), shows a possible 19% gain by my simple year over year calculation and included in the take is a 6% annual dividend yield.
These forward-looking numbers are conjecture based on past year performance. The actual results remain to be seen.They could turn out to move lower. More study is required for you to determine if Westlake Chemical Partners LP (WLKP) is worth your time and money.
Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...
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