LyondellBasell Announces Share Repurchase Program; Increases Dividend
Chemical giant LyondellBasell Industries (NYSE: LYB – $81.37) announced that the company’s board declared an interim dividend of $0.85 per share, representing a nine percent increase from its first quarter payout. The new quarterly dividend will be paid June 7, 2016 to shareholders of record May 24, 2016, and will yield investors 4.1% at current levels. Thanks in part to the company’s strong cash position, LYB also announced that a new share buyback program has been authorized with the purchase of up to 10% of the company’s shares over the next 18 months.
I believe the stock has above-average long-term total return potential. While the company is subject to global economic turbulence, substantial cash flow generation gives management options, including acquiring good-quality companies that complement its current businesses. Also, the dividend is likely to continue growing, commensurate with higher earnings and cash generation.