S&P 500 Stock Offers Index-Highest 12.5% Dividend Yield
The S&P 500 index is not particularly known for high dividend stocks, currently yielding only 1.21% as of December 19. In contrast, the FTSE 100 offers a more attractive yield of 3.16%, prompting income investors to explore options closer to home. Yet, one notable exception in the S&P 500 is Lyondellbasell Industries (NYSE: LYB), which boasts an impressive dividend yield of 12.5%.
Lyondellbasell Industries: A Dividend Powerhouse
Lyondellbasell, a leading chemical company, has built a solid reputation for consistent dividend payments. The company has increased its payout annually since 2015, with dividends now 64% higher than a decade ago.
Dividend History
| Year | Dividend per Share ($) | Dividend Change (%) | Share Price ($) | Yield (%) |
|---|---|---|---|---|
| 2016 | 3.33 | +9.5 | 81.91 | 4.1 |
| 2017 | 3.55 | +6.6 | 105.34 | 3.4 |
| 2018 | 4.00 | +12.7 | 79.41 | 5.0 |
| 2019 | 4.15 | +3.8 | 89.84 | 4.6 |
| 2020 | 4.20 | +1.2 | 86.96 | 4.8 |
| 2021 | 4.44 | +5.7 | 88.07 | 5.1 |
| 2022 | 4.70 | +5.9 | 83.03 | 5.7 |
| 2023 | 4.94 | +5.1 | 95.08 | 5.2 |
| 2024 | 5.27 | +6.7 | 74.27 | 7.1 |
| 2025 (Est.) | 5.45 | +34 | 43.76 | 12.5 |
Between 2016 and 2023, Lyondellbasell’s yield fluctuated between 3.4% and 5.7%. In 2023, however, the company’s share price declined, resulting in an increased yield, making it the highest in the S&P 500.
Challenges and Opportunities
Founded over 70 years ago, Lyondellbasell is one of the largest producers of polymers and a leader in polyolefin technologies. Its products have vital applications in industries like automotive, food packaging, and coatings.
Currently, the company faces challenges due to an oversupply of polyolefins, which has depressed prices. The third-quarter earnings report revealed a $1.2 billion write-down in certain European assets attributed to a downturn in the petrochemical and automotive sectors.
- Cost-cutting measures implemented to preserve cash.
- Delays in larger capital projects.
- Potential sale of underperforming assets.
Despite these challenges, Lyondellbasell’s market fundamentals remain strong. The expected growth in renewable energy and data centers will increase demand for high-performance polymers. Additionally, electric vehicles utilize 10% more plastics than traditional cars, suggesting a promising outlook.
Encouragingly, 2025 marks a potential rebound in polyethylene demand in North America and Europe, with signs of a recovery since the downturn in 2022. With a strong balance sheet, Lyondellbasell is well-positioned to capitalize on any market recovery.
While uncertainties in U.S. trade policy may pose risks, Lyondellbasell Industries is a stock worth considering. Even if the dividend is substantially reduced during a downturn, its yield would likely remain higher than many of its S&P 500 counterparts.
