Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us


Good Chemistry at Lyondell

Lyondell Chemical (LYO) "isn't the kind of stock we normally have in our portfolio," says value investor Scott Black, president of Boston's Delphi Capital Management. It is highly leveraged, with a debt burden of $3.9 billion, he notes, because of an acquisition in 1998. "But we've bought shares because it's an attractive play on the recovery," he says, "and an overdue snapback in chemicals."

The time to buy chemical stocks is when nobody wants them--and before prices shoot up, he argues. A leading low-cost producer of propylene oxide, ethylene, and polyethylene, Lyondell has been improving its balance sheet and making sure that the dividend payout of 6% is protected, says Black. He figures Lyondell will post a loss this year but earn $1 a share in 2003. The big payoff, however, will be in 2004, when Black expects earnings of $4 a share.

Nancy Traub of Credit Suisse First Boston thinks the chemical supply-and-demand cycle bottomed out in 2001. A combination of restocking, demand growth, and limited plant-capacity expansions, she says, will lead to higher prices, margins, and earnings through 2004 and 2005. She doesn't own shares. Credit Suisse First Boston is advising Lyondell on buying some assets from Occidental Petroleum. By Gene G. Marcial

blog comments powered by Disqus