LyondellBasell Bumps up Quarterly Dividend by 7.6%

LyondellBasell (LYB) raised its quarterly dividend by 7.6% to $1.13 per share. The company is one of the world’s largest plastics, chemicals, and refining companies.

The dividend is payable on June 14 to shareholders of record on June 7. LyondellBasell’s annual dividend of $4.52 per share now reflects a dividend yield of 4%.

LyondellBasell CEO Bob Patel said, “Over the past three years, LyondellBasell’s strategic investments have increased our earnings power at all points in the cycle. The stronger dividend reflects confidence in our ability to consistently provide leading returns for LyondellBasell shareholders”.

Patel added, “With this dividend increase, we are on track to post our eleventh consecutive year of annual dividend growth in 2021.”

On April 30, LyondellBasell reported mixed Q1 results. Earnings of $3.18 per share outpaced the Street’s estimates of $2.59. However, total revenues of $9.08 billion were below the consensus estimate of $9.09 billion. (See LyondellBasell stock analysis on TipRanks)

Following the Q1 earnings announcement, Alembic Global analyst Hassan Ahmed assigned a Buy rating and a price target of $120 (6.6% upside potential). 

Ahmed said, “Both durable goods and energy end-markets are showing signs of a strong rebound recently, which we believe will continue through the course of this year. What were end-market, exposure-related earnings headwinds in 2020 should about-face into earnings tailwinds in 2021, in our view. Additionally, we believe that consensus near-term earnings estimates are undemanding.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 6 Buys versus 5 Holds. The average analyst price target of $119.73 implies 6.3% upside potential to current levels. Shares have increased 32.3% over the past six months.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in LyondellBasell is currently Neutral, as the cumulative change in holdings across all 11 hedge funds that were active in the last quarter was a decrease of 4.7 million shares.

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