The Love of Dividends: LyondellBasell (LYB, DOW, EMN)

Investors love dividends and that is being proven yet again when you look at LyondellBasell Industries NV (NYSE: LYB) today.  The chemical company is far from its days of bankruptcy reorganization and now on top of refinancing debt it plans to pay out as much as a $2.6 billion special dividend by the end of the year.

If you look at the outstanding shares, it comes close to $4.55 per share.  Just this week it has also tendered for some $2.8 billion in notes due in 6 years and 7 years.

If you want to know what a good refinancing effort is, try this: noteholder modification that allows for more shareholder payments, and at a lower interest rate that will significantly add to the net earnings.  In short, the company’s capital structure is moving away from the old bondholders to the stockholders.

Shares are trading up over 10% at $30.20 on more than 7.5 million shares (about 150% of normal trading volume).  The current market cap is $17.2 billion and the share price compares to a 52-week trading range of $22.90 to $48.12.  This is the first day shares have been back above $30.00 since September 27 and the stock has not closed above $30.00 since September 20.  This was a $40 stock as recently as August 2.

The August 15, 2011 dividend was listed as $0.20 per share and that would generate a dividend yield of about 2.65% today.

The Dow Chemical Company (NYSE: DOW) is also down considerably from a year high of $42.23 to $27.30.  Its market cap is almost double that of LyondellBasell at over $32 billion and Dow also offers a 3.8% current dividend yield.

Eastman Chemical Co. (NYSE: EMN) is up 3% at $37.27, its 52-week high is $55.36, its market cap is $5.2 billion, and its implied dividend yield is about 2.9%.

JON C. OGG