Reviewing Avient (NYSE:AVNT) & Westlake (NYSE:WLK)

Westlake (NYSE:WLK) and Avient (NYSE:AVNT) are both mid-cap materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.

Dividends

Westlake pays an annual dividend of $2.13 per share and has a dividend yield of 3.4%. Avient pays an annual dividend of $1.10 per share and has a dividend yield of 2.4%. Westlake pays out -61.4% of its earnings in the form of a dividend. Avient pays out 56.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Westlake has increased its dividend for 21 consecutive years and Avient has increased its dividend for 1 consecutive years. Westlake is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Westlake has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Avient has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Westlake and Avient, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westlake	3	8	4	0	2.07
Avient	0	4	3	0	2.43

Westlake currently has a consensus price target of $80.40, suggesting a potential upside of 28.05%. Avient has a consensus price target of $48.75, suggesting a potential upside of 8.49%. Given Westlake’s higher probable upside, equities research analysts clearly believe Westlake is more favorable than Avient.

Insider & Institutional Ownership

28.4% of Westlake shares are held by institutional investors. Comparatively, 95.5% of Avient shares are held by institutional investors. 1.4% of Westlake shares are held by insiders. Comparatively, 0.9% of Avient shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Westlake and Avient”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westlake	$11.17 billion	0.72	-$1.51 billion	($3.47)	-18.09
Avient	$3.26 billion	1.26	$81.90 million	$1.95	23.04

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

Profitability

This table compares Westlake and Avient’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westlake	-3.91%	1.99%	0.93%
Avient	5.27%	12.17%	4.95%

Summary

Avient beats Westlake on 9 of the 17 factors compared between the two stocks.

About Westlake

Westlake Corporation is a global manufacturer of materials and products used in construction, packaging, consumer goods, and other industries. Founded in 1986 and headquartered in Houston, Texas, the company serves customers through operations in North America, Europe, and Asia. Westlake’s Performance and Essential Materials business produces petrochemicals and materials such as polyethylene, styrene, chlor-alkali products, and PVC resins. These materials are used in applications ranging from packaging and household products to water treatment and construction.

About Avient

Avient Corporation is a global provider of specialty polymer materials, services and solutions. Its offerings include colorants, additives, specialty engineered compounds and other materials designed to enhance the performance, appearance or processing of plastics and other polymers. The company serves customers across industries such as packaging, healthcare, transportation, consumer products and construction. Avient’s products include color and additive concentrates, specialty thermoplastic compounds, and high-performance materials, including advanced fibers and composites.