LyondellBasell Offers A Great Entry Into The Depressed Chemical Industry

Louis Gerard
300 Followers
(9min)

Summary

  • LyondellBasell is a global leader in chemicals, currently streamlining operations to boost profitability amid a 22.2% YTD drop in share prices.
  • The company is shutting down its Houston refinery and focusing on high-margin specialty chemicals and sustainable products to improve profitability.
  • Despite weak industrial demand and geopolitical tensions, LYB benefits from lower feedstock costs and strong demand in emerging markets.
  • LYB appears undervalued with a P/E of 9.03 and a 9.28% dividend yield, making it an attractive investment despite cyclical industry challenges.

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Brandon Bell/Getty Images News

Introduction

LyondellBasell (LYB) is a global market leader in the chemical sphere with a wide portfolio of operations across the world. It ranks as a top producer of plastics, chemicals, and refined products. Currently, the chemical industry has

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As a detail-oriented investor with a strong foundation in finance and business writing, I focus on analyzing undervalued and disliked companies or industries that have strong fundamentals and good cash flows. I have a particular interest in sectors such as Oil&Gas and consumer goods. Basically, anything that has been unloved for unjustified reasons that could offer substantial returns. Energy Transfer is one of those companies that I came across when no one wanted to touch it and now I can't resolve myself to sell it. I will always focus more on long-term value investing but I can sometimes lose myself in possible deal arbitrage such as with Microsoft/ Activision Blizzard, Spirit Airlines/Jetblue (that one still hurts), and Nippon/U.S. Steel (perfect exit at $50.19). I tend to shun businesses that I can't understand either high-tech or certain consumer goods such as fashion (give me a Levi's jeans). I don't understand why anyone would invest in cryptocurrencies as well. Through Seeking Alpha, I aim to connect with like-minded investors, share insights, and build a collaborative community of individuals seeking superior returns and informed decision-making, currently on a quest to review every public company.

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