LyondellBasell Hikes Interim Dividend by 20%

Zacks

The Supervisory Board of chemicals and polymers maker LyondellBasell Industries (LYB) has authorized its Management Board to announce a 20% hike in its interim dividend. Thus, stockholders will receive an interim dividend of 60 cents per share as against the prior payout of 50 cents.

The increased interim dividend will be paid on Dec 9, 2013, to stockholders of record as of Nov 21, 2013. However, the announcement of the dividend hike is subject to the company’s Management Board’s adoption of resolution, which is expected to be done on Nov 25.

This dividend hike marks the second increase in 2013. Prior to this, LyondellBasell increased its interim dividend by 25% to 50 cents per share from the earlier dividend payout of 40 cents.

The dividend increase is a testimony to the company’s healthy balance sheet. LyondellBasell ended third-quarter 2013 with cash and cash equivalents of $4,414 million, up 25% year over year. LyondellBasell bought back 13.5 million shares in the reported quarter.

LyondellBasell is a prominent plastics, chemical and refining company. Its products and technologies are used to make items that improve the quality of life for people across the globe including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels.

LyondellBasell posted its third-quarter 2013 results on Oct 29. The company’s earnings from continuing operations of $1.51 per share improved from $1.47 per share recorded a year ago. However, the results missed the Zacks Consensus Estimate of $1.59. The year-ago quarter’s results included one-time gains of 11 cents per share.

Consolidated profit edged up 0.8% year over year to $851 million or $1.50 per share in the quarter from $844 million or $1.46 per share a year ago. The company leveraged favorable North American natural gas environment in the reported quarter.

LyondellBasell logged revenues of $11,152 million in the quarter, down roughly 1% year over year as gains in olefins and polyolefins businesses were masked by declines across intermediates and derivatives and refining units. It missed the Zacks Consensus Estimate of $11,440 million.

LyondellBasell said that factors that aided its results in the third quarter will remain in place in the fourth as well. The company has historically seen lower margin in products such as oxyfuels in winter months and sluggish polyolefin revenues around the holiday season.

LyondellBasell, which remains challenged by a weak European market, continues to progress with its expansion projects that are expected to contribute to its earnings.  It expects to complete the methanol restart project in the fourth quarter followed by the La Porte ethylene debottleneck expansion in mid-2014.

LyondellBasell currently carries a Zacks Rank #3 (Hold).

Other companies in the chemical industry worth considering are Asahi Kasei Corporation (AHKSY), Methanex Corporation (MEOH) and PPG Industries Inc. (PPG). While both Asahi Kasei and Methanex carry a Zacks Rank #1 (Strong Buy), PPG Industries retains a Zacks Rank #2 (Buy).

Read the Full Research Report on PPG
Read the Full Research Report on MEOH
Read the Full Research Report on LYB
Read the Full Research Report on AHKSY


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