Stock of the Day

December 31, 2019

LyondellBasell Industries (LYB)

$59.23
+$1.43 (+2.5%)
Market Cap: $18.66B

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 current stock price is around $720, which may present a buying opportunity for investors looking for value in the chemical sector.
  • LyondellBasell Industries has a positive return on equity of 5.68%, indicating effective management and the ability to generate profit from shareholders' equity.
  • The company recently announced a quarterly dividend of $0.69 per share, translating to an annualized dividend of $2.76, which offers a yield of approximately 5.1%, appealing to income-focused investors.
  • Despite a year-over-year revenue decline, the company remains a key player in the production of polyolefins and advanced polymers, which are essential materials in various industries, including packaging and automotive.
  • Analysts project earnings per share of 8.58 for the current year, suggesting potential growth and profitability in the near future.

LyondellBasell Industries Bear Case

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

  • The company reported a negative net margin of 2.68%, indicating that it is currently spending more to operate than it is earning, which could raise concerns about profitability.
  • Quarterly revenue was down 6.3% compared to the same period last year, reflecting potential challenges in maintaining sales growth in a competitive market.
  • The payout ratio is currently -110.84%, suggesting that the company is paying out more in dividends than it is earning, which may not be sustainable in the long term.
  • Recent revenue figures fell short of consensus estimates, which could indicate that the company is struggling to meet market expectations.
  • As a global chemical company, LyondellBasell Industries is subject to fluctuations in raw material prices and demand, which can impact its financial stability and growth prospects.
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