Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. In the past 3 years Westlake Chemical Partners LP (NYSE:WLKP) has returned an average of 6.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at Westlake Chemical Partners in more detail. View our latest analysis for Westlake Chemical Partners

5 questions I ask before picking a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is it paying an annual yield above 75% of dividend payers?

• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

• Has the amount of dividend per share grown over the past?

• Does earnings amply cover its dividend payments?

• Will it have the ability to keep paying its dividends going forward?

Does Westlake Chemical Partners pass our checks?

The current trailing twelve-month payout ratio for the stock is 89.51%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 89.38%, leading to a dividend yield of 7.84%. Furthermore, EPS should increase to $1.8. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Unfortunately, it is really too early to view Westlake Chemical Partners as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Westlake Chemical Partners generates a yield of 6.65%, which is high for Chemicals stocks.

Next Steps:

With this in mind, I definitely rank Westlake Chemical Partners as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three relevant aspects you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for WLKP’s future growth? Take a look at our free research report of analyst consensus for WLKP’s outlook.

2. Valuation: What is WLKP worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether WLKP is currently mispriced by the market.

3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.