Does LyondellBasell Industries (LYB) Still Make Sense for Dividend Investors?

LyondellBasell Industries (LYB) recently cut its quarterly dividend from $1.37 per share to $0.69, marking the end of a 15-year streak of consecutive dividend increases. Despite the reduction, some investors remain optimistic about the company's prospects. The firm has been taking steps to improve its financial situation, including cost cuts, reduced capital expenditures, and reshaping its portfolio.

These efforts are expected to add $500 million in annual cash flow by the end of 2026. J.P. Morgan upgraded LYB from Neutral to Overweight, citing improved cash generation and a stronger balance sheet, with an estimated free cash flow yield of 12% to 14%. However, analysts caution that chemical cycles are inherently cyclical, and the company's dividend remains tied to the performance of the industry.

The recent quarter showed a more than tripling of adjusted EBITDA from the previous period, but investors should be cautious and monitor how the new dividend performs during future downturns.