5. LyondellBasell Industries N.V. (NYSE:LYB)
Forward P/E: 12.17
Number of Hedge Fund Holders: 41
While discussing his YEV stocks list on a recent episode of Mad Money, Cramer highlighted LyondellBasell Industries N.V. (NYSE:LYB) noting its yield of 5.62%. He pointed out that companies like this typically perform well when the global economy is robust but often face challenges during economic downturns.
“If there’s a perfect time to buy commodity chemical places like Dow and LyondellBasel, it starts when the Fed is cutting, which is right now… in the past two weeks, the Chinese government has announced the most aggressive stimulus efforts that [it] has put in place since the end of the pandemic. And for once, China is actually putting money in people’s pockets. For a communist regime, they seem to really hate handouts, but they’re finally taking action to bolster their ailing economy, which is good news both for their own companies and for cyclicals worldwide that are levered to the Chinese economy, including… LyondellBasel.
A couple of weeks ago, analysts at JPMorgan published a note on the chemicals group. Basically said that they expect these companies to report weak third-quarter results… The analysts at JPMorgan went on to explain that these stocks have been what we call de-risked, meaning the near-term earnings headwinds are already baked into the share price. If you’re willing to look past that and see further into the future, though… LyondellBasel should be on the road to recovery now that interest rates are coming down. You got to anticipate, anticipate, anticipate, that makes a lot of sense to me.
If, like me, you believe the Fed will continue cutting, then bond yields will come down, too, and economies around the world will reaccelerate, bolstering the commodity chemical business as a whole… LyondellBasel. Well, then you got to pull the trigger.
So here’s the bottom line: In this quiet period before earnings season gets crazy, okay? We got to search for new ideas. These are ideas that represent the highest quality stocks for the current moment, the ones that fit the YEV paradigm: yield, earnings growth, and value.”
LyondellBasell (NYSE:LYB) is engaged in the production of petrochemicals, polymers, and fuels. Recently, on October 17, the company announced its acquisition of APK AG, located in Merseburg, Germany, marking a significant step in its commitment to sustainability within the sector. With this move, the company has become the sole owner of APK, which will be integrated into its operations.
The acquisition is in line with LyondellBasell’s (NYSE:LYB) ambition to advance its innovative solvent-based technology for low-density polyethylene (LDPE). The company plans to further develop this technology, with aspirations to establish commercial plants that will enable the production of high-purity materials. These new materials are expected to cater to applications such as flexible packaging for personal care products, addressing the evolving needs of customers and brand owners in a market increasingly focused on sustainability.