The well-known investor and asset manager James P. O'Shaughnessy suggests a winning value parameter -- Shareholder Yield -- in his impressive book "What Works on Wall Street". The buyback yield is the percentage of one year reduction of the company's shares outstanding. Shareholder Yield = Dividend Yield + Buyback Yield In his book, Mr. O'Shaughnessy demonstrates that 83 years back-testing, from 1926 to 2009, have shown that companies with the highest shareholder yield have given superior return with lower downside risk.
LyondellBasell will continue to benefit from low-cost natural gas and NGLs produced from shale formations in the United States. LyondellBasell has compelling valuation metrics and strong earnings growth prospects. The company is generating strong free cash flows and returns value to its shareholders by stock buyback and dividend payments. All these factors lead me to the conclusion that LYB stock still has room to move up. Furthermore, the generous dividend represents a nice income.
Source: Seeking Alpha
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- Early Warning Signs of a Dividend Cut
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