People are afraid of what they don’t know, and even though this company is a well-proven large-cap blue chip, investors are unsure of it because it recently separated into a standalone company from another large cap blue chip. And because of this uncertainty, combined with near-term pricing pressures, investors are afraid. And we like that because it’s creating an attractive income opportunity in a big-dividend blue chip company with lots of cash that it is using to support the dividend, buyback shares and support the ongoing long-term success of the business. We believe this is an attractive trade to place today, and potentially over the next few trading days as long as the share price doesn’t move too dramatically before then.
Strong 5.1% Dividend Blue Chip, Trading at a Discount
If you are looking for a big healthy blue-chip dividend yield with significant price appreciation potential, this global chemicals company is worth considering. Specifically, it is set to generate significant amounts of cash flow over the next two years, it trades at nearly 11% 2020 Free Cash Flow yield, it offers a healthy 5.1% dividend, and it trades at a significant discount to its peers. In this report, we analyze the company’s business mix, cash flow and income prospects, and finally conclude with our opinion on whether the stock offers an attractive balance between risks and rewards.