April 11, 2025 a 07:30 am
LYB: Dividend Analysis - LyondellBasell Industries N.V.
LyondellBasell Industries N.V. is a prominent player in the sector, offering investors an attractive dividend yield. With a longstanding history of 15 years, the company's dividend policies suggest stability, though recent payout ratios highlight some risks that must be monitored closely. This analysis delves into their dividend performance, growth prospects, and financial ratios to provide a comprehensive insight into future dividend sustainability and growth potential.
📊 Overview
The following table provides an overview of LyondellBasell Industries N.V.'s key dividend metrics:
| Metric | Value |
|---|---|
| Sector | Chemicals |
| Dividend yield | 7.00 % |
| Current dividend per share | 5.29 USD |
| Dividend history | 15 years |
| Last cut or suspension | None |
🗣️ Dividend History
The consistency and historical growth of dividends are crucial indicators of a company's financial health and shareholder-focused management. LyondellBasell's dividend payments over recent years depict robust performance with regular increases, although careful attention needs to be paid to recent adjustments to ensure they align with company earnings and cash flows. The dividend history further establishes the foundation for future expectations.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 1.34 |
| 2024 | 5.27 |
| 2023 | 4.94 |
| 2022 | 9.90 |
| 2021 | 4.44 |
📈 Dividend Growth
Dividend growth offers insights into how well a company can not only maintain but also enhance shareholder returns over time. LyondellBasell exhibits a moderate growth in dividends over the recent past, indicative of a potentially stable yet cautious expansion strategy aligned with financial performance.
| Time | Growth |
|---|---|
| 3 years | 5.88 % |
| 5 years | 4.89 % |
The average dividend growth is 4.89 % over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
Payout ratios are critical in assessing how sustainable the company's dividend payments are, considering its earnings and cash flow capabilities.
| Key figure | Ratio |
|---|---|
| EPS-based | 125.82 % |
| Free cash flow-based | 86.45 % |
Both EPS and FCF payout ratios signal a high payout trend, which necessitates a cautionary approach as the company allocates more than its net earnings to dividends. The FCF coverage at 86.45 % may provide some relief, yet the EPS ratio requires careful monitoring to avoid potential future financial stress.
💧 Cashflow & Capital Efficiency
Effective cash flow management and capital efficiency are key for sustainable growth and resilience, ensuring that the company meets its operational, strategic, and shareholder obligations.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 15.82 % | 11.04 % | 15.57 % |
| Earnings Yield | 5.63 % | 6.84 % | 14.30 % |
| CAPEX to Operating Cash Flow | 48.15 % | 30.98 % | 30.89 % |
| Stock-based Compensation to Revenue | 0.23 % | 0.22 % | 0.14 % |
| Free Cash Flow / Operating Cash Flow Ratio | 100 % | 69.02 % | 69.11 % |
The cash flow metrics suggest strong cash conversion efficiency and prudently managed CAPEX relative to cash generation capabilities. Although earnings yields are lower in recent years, free cash flow health remains solid, underpinning overall financial stability.
⚖️ Balance Sheet & Leverage Analysis
A deep dive into the balance sheet and leverage offers a dual view on risk management and financial resilience in volatile markets.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.999 | 1.005 | 1.044 |
| Debt-to-Assets | 0.348 | 0.351 | 0.362 |
| Debt-to-Capital | 0.500 | 0.501 | 0.511 |
| Net Debt to EBITDA | 3.45 | 2.07 | 1.81 |
| Current Ratio | 1.829 | 1.839 | 1.752 |
| Quick Ratio | 1.135 | 1.173 | 1.042 |
The leverage metrics indicate a leveraged balance sheet, yet accompany a strong liquidity position as highlighted by current and quick ratios. This supports operational flexibility and underscores the company's ability to meet short-term liabilities even under potential financial duress.
💡 Fundamental Strength & Profitability
Analyzing fundamental performance and profitability metrics provides valuable insights into operational efficiency and competitive standing.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 10.91 % | 16.35 % | 30.77 % |
| Return on Assets | 3.80 % | 5.71 % | 10.68 % |
| Net Margin | 3.37 % | 5.14 % | 7.69 % |
| EBIT Margin | 5.17 % | 7.55 % | 10.04 % |
| EBITDA Margin | 8.95 % | 11.28 % | 12.10 % |
| Gross Margin | 11.32 % | 12.79 % | 13.09 % |
| R&D to Revenue | 0.33 % | 0.32 % | 0.25 % |
The profitability ratios demonstrate solid returns on equity, assets, and capital, albeit with a decelerating trend. Margins reflect a stable cost management practice crucial for achieving significant returns even as the market dynamics evolve.
📉 Price Development
🔥 Dividend Scoring System
Our dividend scoring system assesses multiple dimensions, assigning a score from 1 to 5 in various categories:
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 3 | |
| Dividend growth | 3 | |
| Payout ratio | 2 | |
| Financial stability | 3 | |
| Dividend continuity | 3 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Total Score: 25/40
🔍 Rating
In conclusion, LyondellBasell Industries N.V. offers a high dividend yield with potential concerns over sustainability due to the high payout ratio. The company exhibits strong cash flow management despite its leveraged balance sheet. Investors should weigh the commendable cash flow coverage against the risks posed by earnings payout exceeding cash availability in strategically aligning their portfolios for long-term growth and income.