LyondellBasell Industries NV: 80% Upside for 10%-Yielding S&P 500 Stock?
May 5, 2025
14 Straight Years of Rising Dividends
Historically, April is one of the best months for the stock market. Since 1945, it has rewarded investors with an average return of 1.6%. This year though, it’s a different matter, with economic uncertainty undermining the broader stock market.
As of this writing (April 22), the S&P 500 is down 5.3% this month, having wiped out trillions of investor value. So, where can investors turn during periods of market volatility?
Right now, the focus could be on larger-cap stocks that provide stable income, including a reliably growing dividend. Larger-cap stocks tend to have mature businesses that can weather market instability. Unfortunately, larger-cap stocks don’t generally have high-yield dividends. The average dividend yield on the S&P 500 is just 1.27%.
But, right now, the stock market sell-off has put some great large-cap, S&P 500 stocks into ultra-high-yield dividend territory. One of the best is LyondellBasell Industries NV (NYSE:LYB).
LyondellBasell Industries NV is a multinational petrochemical company that manufactures plastic, chemical, and fuel products.
Its chemicals are used in a large number of consumer and industrial end products, including personal care products, fresh food packaging, lightweight plastics, home furnishings, construction materials, automotive components, durable textiles, medical applications, paints and coatings, and biofuels.
LyondellBasell Industries NV: An Excellent Cash Performance
As a blue-chip stock, LyondellBasell Industries NV has a long history of giving a strong cash performance, even during periods of economic turmoil. And 2024 was no exception.
Throughout 2024, petrochemical markets faced headwinds from soft global demand, rising raw material costs, and economic uncertainty. But LyondellBasell continued to report solid financial results. (Source: “LyondellBasell reports 2024 earnings,” LyondellBasell Industries NV, January 31, 2025.)
The company fourth-quarter revenue slipped 4.3% on an annual basis to $9.49 billion, but this still beat theWall Street consensus of $9.36 billion.
LyondellBasell reported a net loss of $603.0 million, or a loss of $1.87 per share, compared to a year-ago profit of $185.0 million, or $0.56 per share. On an adjusted basis, it posted earnings of $0.75 per share; this topped Wall Street estimates of $0.70 per share.
The company’s full-year sales were down marginally at $40.3 billion with net income coming in at $1.4 billion, or $4.15 per share. During the year, LyondellBasell generated $3.8 billion in cash from operating activities. This allowed it to reinvest $1.8 billion in capital expenditures while returning $1.9 billion to shareholders through its quarterly dividends and share repurchases.
It ended the year with a robust balance sheet, with $8.0 billion in available liquidity, including $3.4 billion in cash and cash equivalents.
Commenting on the financial results, Peter Vanacker, the company’s chief executive officer, said, “During the fourth quarter, our businesses delivered excellent cash performance amid difficult market conditions. Our strong cash generation and robust balance sheet enabled us to achieve meaningful progress on our strategic goals to drive profitable and sustainable growth at LyondellBasell.”
Wall Street remains bullish on LyondellBasell Industries NV. The company’s 2025 earnings are expected to slip to $5.17 per share before jumping to $7.19 per share in 2026. There are high earnings estimates for 2025 and 2026 of $6.99 and $9.65 per share, respectively. (Source: “Research Analysis,” Yahoo! Finance, last accessed April 22, 2025.)
Q1 Distribution Increased to $0.275/Unit
As already noted, LyondellBasell generates a lot of cash: $3.8 billion from operating activities in 2024. And it uses that cash to reward shareholders. This includes $1.9 billion in 2024 dividends and share repurchases, all in spite challenging market conditions.
In 2024, the company increased its quarterly dividend by seven percent to $1.34 per share, or $5.36 per share on an annual basis, for a current dividend yield of 9.52%.
This also represents the 14th consecutive year in which LyondellBasell has increased its annual dividend. Thanks to its strong cash generation, it is well positioned to continue to grow its dividend. All things being equal, the company should announce an increase to its quarterly dividend this month. (Source: “LYB announces 7 percent Increase to quarterly dividend,” LyondellBasell Industries NV, May 24, 2025.)
Could LYB Stock Have 83% Upside Potential?
LYB stock took a big hit in early April, after President Donald Trump unveiled his global tariffs. While he called it “Liberation Day,” investors saw it differently. On April 3, the S&P 500 fell more than 10%, LYB stock, meanwhile, tumbled more than 20%.
The basic materials sector can be sensitive to industrial demand, and President Trump’s tariffs have created uncertainty. This is what led to the big sell-off. On the plus side, LyondellBasell’s projected earnings remain strong, predicted to grow even further in 2026.
For now, uncertainty is still hanging over Wall Street, which has left LYB stock down:
- 20% over the last month
- 25% over the last three months
- 21% year to date
- 40% on an annual basis
Thanks to the company’s strong global presence and in-demand products, the outlook for LyondellBasell and its stock remains pretty strong. Wall Street analysts have provided a 12-month share price target of $77.58 to $105.00. This points to potential upside of 35% to 83%.
Chart courtesy of StockCharts.com
The Lowdown on LyondellBasell Industries NV
LyondellBasell Industries NV is a leading multinational petrochemical company that manufactures plastic, chemical, and fuel products. Because of its strong international footprint, it is able to provide excellent cash conversion and returns amid challenging market conditions. This includes the company’s 2024 net income of $1.4 billion, diluted earnings of $4.15, and $3.8 billion in cash from operating activities.
LyondellBasell continues to grow and upgrade its core businesses, and the volumes of its sustainable products are rapidly growing and aligned with its profitability targets. This allows management to say that the company “is well-positioned to deliver on our strategic promises and reward shareholders with a growing dividend as part of our overall value proposition.”
And a company with a reliably growing dividend and a stock that has strong double-digit upside should find its way onto the radar of most investors.
LYB stock is already in the holdings of a whopping 1,326 institutional investors. Collectively, they hold 73.47% of all outstanding shares. This includes Vanguard Group Inc, BlackRock Inc, Dodge & Cox Inc, and Morgan Stanley. (Source: “Holders,” Yahoo! Finance, last accessed April 22, 2025.)
