LyondellBasell Raises Its Cash Dividend Rate

On February 23, 2018, LyondellBasell (LYB) announced that it had raised its quarterly dividend rate. Now, LYB will pay a dividend of $1.00 per share. This increase represents an ~17.6% increase on a year-over-year basis and an 11.1% increase over its 4Q17 dividend. 

Investors who hold LYB stock on March 5, 2018, are eligible for this dividend. LYB is expected to pay this dividend on March 12, 2018.

On February 23, 2018, LyondellBasell’s (LYB) dividend yield was ~3.6%. Among its peers, Eastman Chemical (EMN), DowDuPont (DWDP), and PolyOne (POL) had dividend yields of ~2.2%, ~2.1%, and ~1.7%, respectively. 

LYB’s dividend yield is higher than the yield generated from the one-year Treasury bonds. So, LYB can be considered an alternative investment option for investors who look for higher dividend yields.

Bob Patel, CEO of LyondellBasell, said, “A strong and progressive dividend is at the core of LyondellBasell’s capital deployment hierarchy. This double-digit increase reflects confidence in our ability to continue to provide leading returns to shareholders through business cycles.”

LyondellBasell (LYB) gained 2.8% and closed at $111.60 for the week ended February 23, 2018. The gain in its stock price resulted in LYB trading 3.7% above its 100-day moving average price of $107.60, indicating an upward trend in the stock. LYB has gained ~1.2% on a year-to-date basis. 

However, analysts have projected a target price of $118.00 for LYB, which implies a return potential of 5.7% from the closing price as of February 23, 2018. LYB’s 14-day relative strength index (or RSI) of 49 indicates that the stock is neither overbought nor oversold.

Investors can indirectly hold LYB via the Vanguard Materials ETF (VAW), which invests ~4.0% of its portfolio in LyondellBasell. VAW gained 0.90% during the week.