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This Old-Economy Giant Is Keen to Go Green and Keep Paying Investors Along the Way

Few industries have more to prove right now than chemicals.

Once seen as part of the problem, some players are rewriting the script by investing in recycling, cleaner feedstocks, and more innovative production.

This stock is driving that change from the front with a genuine commitment to evolving its business model.

The result? A dividend that’s not just surviving the transition but leading it with new technologies, new partnerships, and new ideas.

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Sometimes the market forgets that dull, dirty work can pay handsomely. But you don’t have to.

That's exactly the setup with one of the world's largest chemical producers (a company that turns crude by-products into plastics, fuels, and the building blocks of modern life) that should be lighting up your radar with its substantial dividend.

LyondellBasell Industries (NYSE: LYB) isn't your typical defensive utility or slow-burning consumer name.

It's a cyclical giant whose fortunes swing with oil prices, global demand, and manufacturing trends.

When things go right, the cash gushes. When they don't, it gets messy.

Yet that volatility is what makes this one worth watching.

At a time when many dividend payers are playing defense, LyondellBasell is still generating substantial income and charting a course toward a more sustainable future.

The markets may have been looking the other way, but the payout keeps flowing.

If you can accept some volatility, LYB’s mix of risk and reward could be the portfolio wild card you crave.

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Manufacturing a Profit with International Operations

LyondellBasell's story begins in the chemical heartland, where it refines crude oil and natural gas liquids into the plastics, coatings, and materials that make modern manufacturing possible.

From packaging and pipes to car interiors and textiles, its products quietly power everyday life.

The company operates across six continents, with major hubs in the U.S. and Europe, providing it with scale and reach that few peers can match.

But make no mistake. This is a cyclical business.

LyondellBasell’s profitability rides on spreads between feedstock costs and selling prices for its polymers.

When oil prices are stable and demand for consumer goods and industrial materials is strong, margins surge and cash pours in.

When the economy softens or energy markets turn choppy, those same profits can evaporate quickly.

What gives LYB an edge is its efficiency and a renewed focus on a transition to circular and low-carbon solutions.

Management has been focused on streamlining operations, cutting debt, and investing in higher-margin specialty products that can smooth out the rougher edges of the cycle.

By incorporating advanced recycling, renewable feedstocks, and cleaner energy use, it becomes clear that while LyondellBasell isn’t immune to downturns, it is more resilient than in past commodity slumps.

That shift has been key to maintaining its generous dividend through volatile conditions.

Action: Remain calm and stay focused, as patience is crucial here.

LyondellBasell tends to shine when sentiment is weak, and commodity fears are already priced in.

The best time to buy isn’t during the boom, it’s when the market’s worried about one.

If you can handle short-term turbulence, building a position on dips could pay off handsomely when the next upcycle hits.

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A Double-Digit Yield 

LyondellBasell has built a reputation for rewarding shareholders, even when the market’s been less than kind.

The company has steadily increased its regular dividend over the years and isn’t shy about supplementing payouts with occasional specials when cash flow allows.

That consistency has earned it a loyal following among income-focused investors who value reliability as much as yield.

If that sounds like you, you should know that LYB’s current yield is a very buoyant 11.48%.

Its quarterly yield is $1.37, but with 14 years of dividend increases in its rear-view mirror, that amount could increase.

Action: Treat this as a “buy the dip” play, not a set-and-forget stock.

Wait for weakness (particularly when the market starts worrying about a slowdown), then lock in the higher yield before the cycle revs up again.

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Beware: The Cycle Could Bite Back

Every income story has its dark side, and for LyondellBasell, it’s all about the cycle.

This is a company that lives and dies on the current level of global demand for plastics and chemicals, products that rely on steady manufacturing output and consumer spending.

When those slow, the ripple effect hits hard. Margins can compress in a heartbeat as energy and feedstock costs rise faster than selling prices.

Then there’s the broader challenge of transition.

As the world moves toward sustainability and reduced plastic waste, chemical producers like LYB face mounting regulatory and reputational pressures.

The company is investing in recycling technologies and cleaner production, but those shifts take time and money and may squeeze short-term profitability.

Furthermore, high leverage amplifies the downside risk.

Capital-intensive businesses rarely have the luxury of sitting still, and even in lean times, LyondellBasell must continue to invest to stay competitive.

If global growth weakens further or oil prices spike, you may see earnings dip, and the dividend, which has been resilient so far, would face tougher scrutiny.

Action: Tread carefully here. If you’re already holding LYB, keep an eye on energy spreads and global PMI data as both are early warning signs for margin pressure.

If you’re new to the stock and keen to place your bet, consider waiting until signs of stabilization appear before jumping in.

In a downturn, there’s no shame in letting the dust settle before you plug back in.

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Should You Buy?

Unlike many high-yield names, LYB doesn’t rely on financial engineering to fund its dividend.

It generates real cash from tangible assets that will remain essential for decades, and it is working hard to become low-carbon, more sustainable, and profit from the circular economy.

As supply chains normalize and energy markets find equilibrium, those cash flows could strengthen fast, and that’s where you can benefit most.

Add in the company’s commitment to cleaner technologies and recycling initiatives, and you have a business that’s evolving rather than fading.

The next phase of growth might not come from volume, but from smarter, more sustainable margins.

Action: If you identify as a contrarian income investor, keep LyondellBasell on your radar for moments of maximum pessimism.

Those are the times when the headlines look ugly, but the fundamentals are quietly improving.

That’s when this stock typically starts its next climb, turning a high-risk yield into high-return potential.

That’s all for today’s edition of the Dividend Brief.

Thanks for reading, and if you have any feedback or dividend stocks you want me to take a look at, just reply to this email!

—Noah Zelvis
DividendBrief.com