BASFY - LyondellBasell- Not A Bargain But A Cash Machine

2024-05-04 07:13:45 ET

Summary

• LyondellBasell is a Dutch chemical company with operations in multiple countries, generating over $40 billion in revenues and $5 billion in cash from operating activities in 2023.
• The company has a history of strong cash generation, with a 16.9% annual return for investors through buybacks and dividends.
• After a difficult year 2023, the company expects growing demand, better pricing and higher gasoline crack spreads.
• Regarding free cash flows and EBITDA, the company offers an attractive valuation and an increasing dividend.

1. Investment thesis

LyondellBasell (LYB) is a Dutch chemical company with operations in the Netherlands, the USA, Japan, Germany and many other important countries. The stock returned 16.9% p.a. (13.4% p.a. without dividends) by buying back 243 million shares (42.7%) and returning a lot of cash through dividends of more than $55 per share in 14 years....

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