Income · Stocks to Consider and Updates

LyondellBasell Misses Estimates; Hikes Dividend

Shares of chemicals major LyondellBasell Industries N.V. (NYSE: LYB – $77.65) are retreating about 5% after reporting second quarter earnings per share of $2.70, down from $4.22 a year ago and missing the $2.83 average estimate from analysts. Sales fell to $9.05 billion from $10.21 billion a year earlier, also short of the $9.61 billion the Street was looking for. The company said its results were weighed down by steep declines in operating income from its  Refining and Intermediates and Derivatives business units. Except for the company’s Advanced Polymer Solutions segment, all of its operating segments reported sales declines from last year. Adjusted earnings, however, improved from a weak first quarter by about $1.6 billion. Despite lower second quarter results, management is increasing the quarterly dividend to $1.05 per share from $1.00 at an annualized $4.20.

       This stock is suitable for investors with a tolerant for risk. The company’s above average 5.15% dividend yield is very attractive, particularly in this low interest rate environment. The dividend is well covered, thanks to Lyondell’s substantial cash flow-generating ability and strong balance sheet, and it is likely to continue to grow.

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