LyondellBasell Industries

Current Share Price:

Valuation Verdict:

Analysis Date:

73.27 Overvalued

21/11/2025

Current Dividend Yield:

Dividend Safety Verdict:

Analyst:

3.77 Questionable

European DGI

Current Share Price:

73.27 Valuation Verdict:

Overvalued

Analysis Date:

21/11/2025

Current Dividend Yield:

3.77 Dividend Safety Verdict:

Questionable

Analyst:

European DGI

Key Data at the Time of Analysis:

Share Price

$44.78

Dividend / Share

$5.48

Dividend Yield

12.82%

Dividend Growth (Yrs)

5 Yr Dividend CAGR

5.46

Safety Score

Company Profile

LyondellBasell Industries is a leading global chemical company specializing in the production of chemicals, plastics, and refining products. It develops advanced materials for industries like packaging, automotive, and construction while driving innovations in recycling and emissions reduction. Revenue-wise and over the last trailing-twelve-months, the Olefins and Polyolefins is the largest segment, bringing in 43%, followed by Intermediates and Derivatives with 26%, and the Refining and Advanced Polymer Solutions the rest.

Country:

United States

Sector:

Basic Materials

Industry:

Chemicals

Market Cap Type:

Large-cap (≥ $10 billion)

Payout Frequency:

Quarterly

Ticker Symbol

LYB

Dividend Policy

LyondellBasell’s capital allocation strategy prioritizes the return of capital through a strong and sustainable dividend while investing in reliable operations and disciplined growth supported by an investment-grade balance sheet. We are committed to delivering superior long-term value for our investors.

Source:

https://investors.lyondellbasell.com/why-invest/default.aspx

Dividend Currency:

USD

Financial Overview

5 Yr Revenue Growth

6.2%

5 Yr EPS Growth

-33%

Credit Rating

Baa2

FCF Payout %

242%

EPS FWD Payout %

136%

ROCE

-3.44%

Recent Quarter Highlight

The company is under high margin pressure due to price pressure (i.e. China supply coming online) and cost pressure (i.e. higher natural gas prices). The company reported negative earnings and negative free cash flow. The dividend isn’t covered.

Investment Thesis

LyondellBasell (LYB) is a global leader in chemicals and plastics, known for its strong cash flows, high dividends (including occasional special dividends), and, where possible, share buybacks. Its diversified business model balances cyclical refining with advanced materials, while its focus on sustainability and plastics recycling positions it for long-term growth, particularly in countries with significant climate-related investments (think Germany). With exposure to high-demand industries like packaging and automotive (including EVs), the company is well-placed to benefit from key secular industry trends.

Risks / Bear Case

Commodity Price Volatility: LYB’s earnings are sensitive to fluctuations in raw material and energy prices, impacting margins. Regulatory and Environmental Risks: Stricter environmental regulations and climate policies could increase costs and limit growth. High Payout Ratio: Its significant dividend payouts may be challenging to sustain during prolonged downturns, especially with a mediocre balance sheet.

Valuation

Due to the cyclical nature, we believe LYB is best valued using the dividend discount model. We do expect a 50% dividend cut in Q1 2026, so we will assume a $2.74 annual dividend which will then be able to grow again at 6% when the sector and the earnings recover. Applying this at a discount rate of 11% gives us a fair value price of $54.80.

Price / Earnings

#n/a

Forward P/Earnings

11.51 Price / FCF/share

18.89 Discounted Cash Flow

#n/a

Dividend Discount Model

$54.80

Chowder Rule

18.28 Dividend Yield History

By comparing today’s dividend yield to its five-year range (5th–95th percentile), you can see whether the stock looks attractive from a yield perspective, while keeping in mind that an unusually high yield may also signal a potential value trap if the business is under pressure.

Disclaimer: Companies that have had a stock split in the past year (e.g., Apple) may show misleading dividend yield data. We are working to correct this.

Conclusion

We believe the dividend will have to be cut in the first quarter of 2026 unless a miracle earnings recovery were to happen. Hence, the dividend is unsafe and income seeking investors wanting a reliable and growing dividend should seriously reconsider buying shares in LYB.

Latest Stock Updates

LyondellBasel at a 12.8% Yield – Is it Safe?

November 21, 2025

It’s an old piece of stock market wisdom that any dividend yield around 10% is a red flag and usually signals that a dividend cut is coming soon. So let’s take a look at LyondellBasell (LYB) and assess its dividend safety to see if the famous phrase applies: “this time

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