An example of a high quality equity which we have recently included in our portfolio is as follows:
LyondellBasell Industries NV (LYB)
LYB is a global manufacturer of chemicals and polymers, based in Rotterdam The Netherlands. LYB has had it’s share of problems having exited Chapter 11 bankruptcy in April, 2010. However, since that time LYB has hit the ground running, having doubled or more than tripled several key metrics such as cash flow and earnings per share. Further, during this time LYB has raised dividends per share from $0.55 per share to $2.70 per share, which currently translates to a healthy 2.7%. Since we added LYB to the Geneva Financial Group Model a little over one month ago, LYB has gained over 22% plus dividends. The recent drop in the price of oil, a primary feedstock for most of LYB’s production, appears to be a primary driver of LYB’s good fortunes. Overall, LYB reported earnings of $1.16 billion, or $2.41 a share, up from $944 million, or $1.72 a share, in the prior-year period. Excluding items, earnings from continuing operations were $2.54 per share–a new quarterly high, the company said. Cash flow due to growing chemical sales is expected to continue to grow, giving support to the dividend payout. Therefore, we expect LYB to continue to outpace the market in the months to come.