High dividend, collapsed profits. Is the chemical giant an opportunity again?
Dividend investors have favored the chemical sector for an entire decade. Companies that produce plastics and basic chemicals paid high and reliably growing yields because their products are needed by practically every industry, from automotive to construction to food packaging. This image of a “boring but stable” business has fallen apart since 2023.
Key points
In February 2026, the company cut its quarterly dividend in half to $0.69 per share, ending fifteen years of uninterrupted payout growth.
Adjusted earnings per share in the second quarter of 2026 reached $4.30, 29 percent above analysts’ estimates of $3.33.
Second-quarter 2026 revenues reached $9.18 billion, up 20 percent year-over-year thanks to exceptionally high margins following a supply disruption from the Middle East.
Net debt stands at $11.7 billion, which, combined with an S&P BBB rating with a negative outlook, places the company at the lower end of investment grade.
The dividend yield after the cut is 4.68 percent annually, still above the market average, but roughly half of what it was before the February reduction.
Petrochemical giants’ margins have plunged to multi-year lows. In Europe, over thirty million tons of annual chemical capacity have been permanently shut over the past three years, about nine percent of the entire continental market. Nine ethylene cracking units, representing roughly one-sixth of European capacity, have either been idle or preparing for shutdown. Companies that for decades had paid rising dividends suddenly had to explain to investors why cash flow was insufficient even to maintain them.
Then, at the end of February 2026, came a shock that no one expected. An armed conflict between the United States, Israel, and Iran closed the Strait of Hormuz for several weeks, through which normally flows a fifth of the world’s oil and a quarter of its liquefied natural gas. Suddenly, fifteen million tons of Middle Eastern petrochemical capacity per year vanished from the market, and tens of millions more tons in Asia found themselves without raw materials. Prices of plastics and basic chemicals shot up, and companies that just a year earlier were fighting for survival reported record quarterly margins.