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Westlake Chemical's Dividend and Dividend Yields

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Part 2
Westlake Chemical's Dividend and Dividend Yields PART 2 OF 5

Westlake Chemical Is Set to Pay Its 4Q17 Dividend

Westlake Chemical to pay 4Q17 dividend

Westlake Chemical (WLK) is set to pay its 4Q17 dividend on December 11, 2017. To be the beneficiaries of the dividend, investors must have held the stock no later than November 27, 2017. WLK has declared a dividend of $0.21 per share. In 3Q17, it increased its dividend to $0.21 from $0.19 in 2Q17.

Westlake Chemical Is Set to Pay Its 4Q17 Dividend

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Dividend growth

WLK’s 4Q17 dividend of $0.21 represents an increase of 10.2% on a year-over-year basis. However, since 2013, its dividend has witnessed an unprecedented CAGR (compound annual growth rate) of 18%.

Free cash flow

Now let’s see if WLK’s free cash flow is strong enough to support that kind of dividend growth. At the end of 3Q17, WLK had free cash flow of $548.4 million, which is more than double its free cash flow in 2014, and one more quarter of earnings is still to come. When converted into free cash flow per share, it’s $4.26.

Since 2013, WLK’s free cash flow per share has grown at a CAGR of 42.1%, which suggests that its free cash flow could be high enough to support its dividend growth. If strong free cash flows continue, WLK could possibly increase its dividend significantly, which would improve its dividend yield.

Investors can hold Westlake Chemical indirectly by investing in the PowerShares DWA Basic Materials Momentum ETF (PYZ), which has invested 1.1% of its portfolio in Westlake Chemical. The fund’s other holdings include LyondellBasell (LYB), Ashland (ASH), and FMC (FMC) with weights of 4.5%, 3.6%, and 3.4%, respectively, as of December 5, 2017.

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