Westlake Chemical Partners LP Yields 8.7% with 12.3x Forward Earnings
Westlake Chemical Partners LP offers an 8.69% forward dividend yield on a $1.89 annual payout, trading at 12.26x forward earnings versus the sector’s 15.51x. Its long-term ethylene supply agreement with Westlake Corporation underpins distributions despite a 136% forward payout ratio that tightens coverage.
1. Partnership Details
Westlake Chemical Partners LP owns ethylene production assets and sells most output to Westlake Corporation under a long-term supply agreement, providing revenue visibility and underpinning its payout structure.
2. Dividend Yield and Valuation
The partnership offers a forward annual dividend of $1.89 per unit, corresponding to an 8.69% yield, while units trade at 12.26x forward earnings compared with a 15.51x sector average.
3. Coverage and Risk
Despite high yield, coverage is tight with a 136% forward payout ratio, indicating distributions exceed projected distributable cash flow and raising questions about long-term payout stability under market stress.