In this article, we discuss the 10 best chemical dividend stocks with over 2% yield. You can skip our detailed analysis of the chemical industry, and go directly to read 5 Chemical Dividend Stock with Over 2% Yield.
The U.S. chemical industry is crucial to the national economy as several other industries depend on it for their operations. According to a report published by American Chemistry Council, the U.S. is the second-largest producer of chemicals and provides 13% of the world’s chemicals. However, the industry was hit hard by the pandemic due to its cyclic nature, as chemical production in the U.S. fell by 4.3% in 2020. However, as the economy begins to recover after the pandemic, analysts have a positive outlook for the chemical industry.
Chemical Industry: Growth Outlook for 2022
Due to the growth in consumer demand, the American Chemical Council (ACC) expects the chemical industry to grow by 3.2% in 2022, as reported by Gordon Brothers, an investment company. Moreover, the report also mentioned that ongoing supply chain disruptions may cause production issues. However, the industry seems to be on a firm footing after the pandemic as, in 2021, U.S. chemical exports rose to $151 billion, from $125 billion in 2020. The exports are expected to reach $182 billion by 2025, according to Independent Commodity Intelligence Services.
With the recent technological advances, the chemical industry also participates in the digital revolution as many chemical companies try to adopt digital platforms in their operations. According to Deloitte, digital tools provide environmentally-friendly ways to carry out the extraction process.
Amid the threats of climate change, the chemical industry will more likely adopt decarbonization, since the industry represents 25% of the total emissions of the industrial sector, as reported by IEA. However, many companies are shifting focus to digitalization, especially in chemical plants to increase efficiency and streamline maintenance. Some of the major names in the chemical sector are Exxon Mobil Corporation (NYSE:XOM), Dow Inc. (NYSE:DOW), Chevron Corporation (NYSE:CVX), and Ciner Resources LP (NYSE:CINR).
In this article, we will focus on the chemical stocks that pay dividends.
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Our Methodology:
The companies mentioned below are the stocks that pay dividends with over 2% yield. We considered analysts’ ratings and basic growth fundamentals while choosing these stocks. Moreover, the hedge fund sentiment for each stock was measured using Insider Monkey’s Q3 data of the 867 hedge funds.
The stocks are ranked from the lowest yield to the highest.
Chemical Dividend Stock with Over 2% Yield
10. Air Products and Chemicals, Inc. (NYSE:APD)
Number of Hedge Fund Holders: 32
Dividend Yield as of December 12: 2.03%
Air Products and Chemicals, Inc. (NYSE:APD) is an American chemical company that sells chemicals and related products for industrial uses. On November 18, the company announced a quarterly dividend of $1.50 per share, with a dividend yield of 2.03%. Air Products and Chemicals, Inc. (NYSE:APD) has a track record of 39 years for consistent dividend growth, making it one of the best chemical dividend stocks.
Recently, Air Products and Chemicals, Inc. (NYSE:APD) signed a deal with the government of Indonesia to develop a coal gasification industry, with the main aim of converting coal into high-value chemicals. The deal is valued at $15 billion. In fiscal Q4 2021, the company reported revenue of $2.84 billion, presenting a 22.4% growth from the prior-year quarter. Due to the company’s strategic developments, Mizuho initiated its coverage on Air Products and Chemicals, Inc. (NYSE:APD) in November, with a Buy rating and a $312 price target.
The number of hedge funds tracked by Insider Monkey having stakes in Air Products and Chemicals, Inc. (NYSE:APD) decreased in Q3 to 32, from 40 in the preceding quarter. However, in Q3, the value of these stakes jumped to $528.7 million from $456.4 million in Q2.
As of the close of December 12, Air Products and Chemicals, Inc. (NYSE:APD)’s 12-month returns stood at 11.28%. Like Exxon Mobil Corporation (NYSE:XOM), Dow Inc. (NYSE:DOW), Chevron Corporation (NYSE:CVX), and Ciner Resources LP (NYSE:CINR), Air Products and Chemicals, Inc. (NYSE:APD) is also one of the notable chemical stocks.
9. Huntsman Corporation (NYSE:HUN)
Number of Hedge Fund Holders: 26
Dividend Yield as of December 12: 2.28%
Huntsman Corporation (NYSE:HUN), an American manufacturer of chemical products, surged following the Q3 beat. The stock delivered a 31.5% return to shareholders in 2021, as of the close of December 12. In its Q3 report, Huntsman Corporation (NYSE:HUN) posted an EPS of $1.08, beating estimates by $0.16.
As per Insider Monkey’s Q3 data, 26 hedge funds tracked by Insider Monkey held stakes in Huntsman Corporation (NYSE:HUN), down from 27 in the previous quarter. The total value of these stakes is roughly $985 million. Among these hedge funds, Jeffery Smith’s Starboard Value LP was the company’s leading shareholder in Q3, holding roughly 11.6 million shares.
Huntsman Corporation (NYSE:HUN) pays a quarterly dividend of $0.1875 per share. The stock’s current dividend yield stands at 2.28%. Recently, Stifel showed confidence in the company’s targets as it reported solid Q3 earnings. The firm lifted its price target on Huntsman Corporation (NYSE:HUN) to $59, while maintaining a Buy rating on the shares.
8. Eastman Chemical Company (NYSE:EMN)
Number of Hedge Fund Holders: 30
Dividend Yield as of December 12: 2.35%
In Q3 2021, Eastman Chemical Company (NYSE:EMN), an American chemical manufacturer, experienced a positive hedge fund sentiment. The number of hedge funds tracked by Insider Monkey having stakes in the company increased to 30 in Q3, from 27 in the previous quarter. The total worth of these stakes is over $254.6 million.
Eastman Chemical Company (NYSE:EMN) made it to our list of the best chemical dividend stocks, as the company has a 12-year track record of consistent dividend growth. Currently, it pays an annual dividend of $2.76 per share, with a dividend yield of 2.35%. In Q3, Eastman Chemical Company (NYSE:EMN) earned $2.72 billion in revenue, which beat analysts’ estimates by $120 million. Moreover, the company expects 8%-12% growth in its annual adjusted EPS over the next three years.
As the company aims to shift towards sustainability to drive growth, recently, Wells Fargo lifted its price target on Eastman Chemical Company (NYSE:EMN) to $138, while keeping an Overweight rating on the shares. The firm’s analyst also acknowledged the company’s molecular recycling plant project. Eastman Chemical Company (NYSE:EMN) surged 18.99% year-to-date, as of the close of December 12.
7. FutureFuel Corp. (NYSE:FF)
Number of Hedge Fund Holders: 17
Dividend Yield as of December 12: 3.21%
FutureFuel Corp. (NYSE:FF) is an American developer and producer of chemicals and biofuels.
In Q3, FutureFuel Corp. (NYSE:FF) reported an 82.3% year-over-year growth in its revenue at $$98.6 million. The company pays an annual dividend of $0.24 per share. The stock’s current dividend yield stands at 3.21%.
At the end of Q3 2021, 17 hedge funds tracked by Insider Monkey reported owning stakes in FutureFuel Corp. (NYSE:FF), up from 14 in the previous quarter. The consolidated value of these stakes is $29.8 million. Jim Simons’ Renaissance Technologies was the largest shareholder of the Missouri-based company, holding a stake worth $14 million.
6. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 51
Dividend Yield as of December 12: 4.53%
Chevron Corporation (NYSE:CVX) is an American energy company that also runs a chemical business, Chevron Phillips Chemical Company LLC. It is one of the largest producers of ethylene, propylene, and specialty chemicals. With a 4.53% dividend yield and 33 years of consistent dividend growth, Chevron Corporation (NYSE:CVX) remains one of the best chemical dividend stocks.
Recently, RBC Capital upgraded Chevron Corporation (NYSE:CVX) to Outperform on grounds of its stable business plans. The firm also lifted its price target on the stock to $145. The company announced its Q3 results on October 27, and reported an EPS of $2.96, beating the consensus by $0.77. Moreover, Chevron Corporation (NYSE:CVX) also paid dividends worth $2.6 billion during the quarter.
As per Insider Monkey’s Q3 data, 51 hedge funds tracked by Insider Monkey held a $4.4 billion worth of stake in Chevron Corporation (NYSE:CVX) in Q3. In the preceding quarter, 50 hedge funds held stakes in the company, valued at $4.2 billion.
Chevron Corporation (NYSE:CVX) also gained ground among investors, like Exxon Mobil Corporation (NYSE:XOM), Dow Inc. (NYSE:DOW), and Ciner Resources LP (NYSE:CINR).
ClearBridge Investments mentioned Chevron Corporation (NYSE:CVX) in its Q1 2021 investor letter. Here is what the firm has to say:
“While reducing in health care and consumer staples, we increased our exposure to high-quality names in economically sensitive areas of the market. We added to low-cost, high-quality energy names, (including) Chevron. We are positive on the company’s strong balance sheets, competitive positions and exposure to an economic recovery.”
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Disclosure. None. 10 Chemical Dividend Stock with Over 2% Yield is originally published on Insider Monkey.
