Dutch chemical company LyondellBasell Industries (NYSE: LYB – $74.85) reported earnings in the fourth quarter that exceeded estimates while its sales fell short, but said its growth prospects remain strong. The chemical giant reported adjusted earnings of $2.20 per share from $2.48 a year ago, topping the $2.14 average estimate from analysts. Revenue fell 31% to $7.07 billion from $10.29 billion and missed the $7.52 billion consensus estimate. According to CEO Bob Patel: “While near-term industry performance will partially hinge on the direction of raw material costs and subsequent price responses, our growth positions remain advantaged, product demand continues to be good and our expansions are generating incremental earnings”.
This stock has good long-term total return potential. The generous dividend, yielding 4%, should remain secure and continue to increase. Meanwhile, Lyondell’s high operating leverage should permit it to reap considerable profits once demand for its products (specifically olefins and polyolefins) picks up. However, slow global growth is anticipated for at least a few more quarters and the shares remain a candidate for those aggressive investors that can show some patience.