- The relatively underfollowed Westlake Chemical Partners has once again sustained their high distribution yield throughout 2021.
- Even after removing their temporary working capital draw, their financial performance remained resilient and produced ample free cash flow.
- Although once again there are no additional returns to unitholders, which I suspect is keeping their units range-bound.
- Given their very low leverage and several easy sources of funding, this leaves them too conservatively financed and thus they could repurchase one-quarter of their outstanding units to create value.
- Whilst I may not agree with their overly conservative approach to capital allocation, I still believe that maintaining my bullish rating is appropriate given their safe high distribution yield.
For further details see:
Westlake Chemical Partners: Too Conservatively Financed For Their Own Good