- Apart from temporary working capital movements, Westlake Chemical Partners produced solid cash flow performance for 2021 and the first quarter of 2022.
- Given their steady nature, nothing appears set to change materially during 2022 with no meaningful events on the horizon.
- Despite their ample free cash flow, management seems reluctant to boost their distributions, oddly because there have not been adequate capital flows into their units.
- I feel this runs contrary to creating value since in my view, distributions should be based upon returning excess capital and not necessarily dependent upon their unit price.
- Their unit price is already trading around its all-time high anyway and thus I now feel that downgrading to a hold rating from my previous buy rating is now appropriate.
For further details see:
Westlake Chemical Partners: More Of The Same In 2022, Downgrading