LyondellBasell cuts dividends due to downturn in the chemical industry

2026-02-20 13:28:20

Investing.com - LyondellBasell Industries announced on Friday that it will cut its quarterly dividend nearly in half, from $1.37 per share to $0.69, a decrease of 49.6%.

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This move reduces the annual dividend to $2.76.

The dividend will be paid on March 9 to shareholders registered as of March 2, with the ex-dividend date on February 27. The new payout implies a dividend yield of approximately 5%.

Vital Knowledge analysts stated in a report that this cut was already expected by the market. According to the firm, “most people believed the dividend would be reduced because $1.37 was well above the company’s earnings per share over the past few quarters.”

The firm added that even the new dividend “represents a very high payout ratio,” noting that other chemical producers in the sector also lowered dividends during the long downturn. Although the stock recently rebounded amid cyclic market rotations, Vital Knowledge warned that this cut “could trigger selling pressure.”

The stock initially dropped sharply in pre-market trading but is now only down 0.1%.

This decision was made after Morgan Stanley commented earlier this month, noting that LyondellBasell is struggling to maintain its dividend but acknowledging that “all indicators are becoming challenging.”

Management previously outlined cash flow constraints for 2026, including approximately $1.8 billion needed to sustain the previous dividend and restrictions on share buybacks this year.

LyondellBasell believes the chemical cycle may bottom out in Q4 2025, although visibility remains limited.

According to Morgan Stanley, the company pointed to early signs of demand recovery, slowed construction of new factories in China, and potential supply tightening in Europe.

However, restoring cash flow remains a top priority in the near term, and the dividend cut highlights the pressures caused by industry downturns.

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