Stock of the Day

December 31, 2019

LyondellBasell Industries (LYB)

$65.00
-$0.08 (-0.1%)
Market Cap: $21.00B

About LyondellBasell Industries

LyondellBasell Industries N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. The company operates in six segments: Olefins and PolyolefinsAmericas; Olefins and PolyolefinsEurope, Asia, International; Intermediates and Derivatives; Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyethylene, and polypropylene; and propylene oxide and derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol. In addition, the company produce and markets compounding and solutions including polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers including catalloy and polybutene-1; and refines heavy, high-sulfur crude oil and other crude oils, as well as refined products, including gasoline and distillates. Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications. LyondellBasell Industries N.V. was incorporated in 2009 and is headquartered in Houston, Texas.

LyondellBasell Industries Bull Case

Here are some ways that investors could benefit from investing in LyondellBasell Industries:

  • The company reported strong earnings per share of $4.30 for the latest quarter, significantly exceeding analysts' expectations, indicating robust financial performance.
  • LyondellBasell Industries has a positive return on equity of 17.44%, suggesting effective management and profitability in generating returns for shareholders.
  • Recent revenue growth of nearly 20% compared to the same quarter last year demonstrates the company's ability to expand its market presence and increase sales.
  • The current stock price is around $72.56, which reflects a favorable valuation in light of the company's recent performance and growth prospects.
  • The company has announced a quarterly dividend of $0.69 per share, providing a steady income stream for investors, with an annualized yield of 4.3%.

LyondellBasell Industries Bear Case

Investors should be bearish about investing in LyondellBasell Industries for these reasons:

  • The company has a negative net margin of 1.13%, indicating that it is currently facing challenges in profitability relative to its revenues.
  • The dividend payout ratio is extremely high at -244.25%, suggesting that the company may be paying out more in dividends than it earns, which could be unsustainable in the long run.
  • Despite positive earnings, the revenue for the latest quarter was slightly below analysts' consensus estimate, which may raise concerns about future growth potential.
  • Market analysts have mixed ratings on the stock, with several giving it a "Sell" rating, indicating potential caution among investors regarding its future performance.
  • Increased competition in the specialty chemicals sector could impact LyondellBasell Industries' market share and pricing power, posing risks to its profitability.
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