Home > Comparison > Basic Materials > IFF vs LYB
The strategic rivalry between International Flavors & Fragrances Inc. (IFF) and LyondellBasell Industries N.V. (LYB) shapes trends in the specialty chemicals sector. IFF operates as a diversified supplier of natural and synthetic ingredients across consumer products, while LYB focuses on large-scale chemical manufacturing and refining. This analysis contrasts their growth and capital intensity to identify which firm presents a superior risk-adjusted opportunity for a well-balanced portfolio.
Table of contents
Companies Overview
International Flavors & Fragrances Inc. and LyondellBasell Industries dominate the specialty chemicals sector with distinct market approaches.
International Flavors & Fragrances Inc.: Specialty Ingredients Innovator
This company leads in specialty chemical ingredients for consumer products globally. Its revenue stems from diverse segments including Nourish, Scent, Health & Biosciences, and Pharma Solutions. In 2026, the strategic focus centers on expanding natural and plant-based ingredients to meet rising consumer demand for health-conscious products.
LyondellBasell Industries N.V.: Polyolefins and Refining Powerhouse
LyondellBasell stands as a global leader in olefins, polyolefins, and refining. It generates revenue through multiple segments spanning advanced polymers, refining, and technology licensing. The company’s 2026 strategy emphasizes innovation in polymer solutions and expanding refining capabilities to secure long-term market relevance.
Strategic Collision: Similarities & Divergences
Both companies focus on specialty chemicals, but IFF prioritizes consumer-driven natural ingredients, while LyondellBasell targets industrial polymers and refining. They compete primarily in innovation and product quality within specialty chemicals. Their investment profiles differ sharply: IFF offers diversified exposure to consumer trends, whereas LyondellBasell presents a capital-intensive, commodity-linked model.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | International Flavors & Fragrances Inc. (IFF) | LyondellBasell Industries N.V. (LYB) |
|---|---|---|
| Revenue | 11.5B | 40.3B |
| Cost of Revenue | 7.36B | 35.7B |
| Operating Expenses | 3.36B | 2.75B |
| Gross Profit | 4.12B | 4.56B |
| EBITDA | 1.60B | 3.61B |
| EBIT | 0.58B | 2.08B |
| Interest Expense | 0.31B | 0.48B |
| Net Income | 0.24B | 1.36B |
| EPS | 0.95 | 4.16 |
| Fiscal Year | 2024 | 2024 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals which company converts sales into profit most efficiently, highlighting operational strength and momentum.
International Flavors & Fragrances Inc. (IFF) Analysis
IFF’s revenue shows modest growth, rising slightly to $11.48B in 2024 from $11.48B in 2023, while net income recovered sharply to $243M from a loss of $2.57B. Gross margin improved to 35.9%, signaling better cost control. EBIT margin stands neutral at 5.1%. The company’s turnaround in profitability indicates improving operational efficiency and momentum.
LyondellBasell Industries N.V. (LYB) Analysis
LYB posted a revenue decline to $40.3B in 2024 from $41.1B in 2023, with net income falling 36% to $1.36B. Gross margin contracted to 11.3%, reflecting tighter cost pressures. EBIT margin remains steady at 5.2%. Despite solid revenue scale, LYB faces weakening profitability and margin compression over the latest year.
Margin Resilience vs. Scale Advantage
IFF demonstrates a remarkable rebound in net income and margin expansion despite flat revenue. LYB boasts larger top-line figures but struggles with declining profitability and margins. IFF’s profile appeals to investors valuing margin recovery and operational momentum, while LYB’s scale advantage is undermined by earnings pressure.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of each company:
| Ratios | International Flavors & Fragrances Inc. (IFF) | LyondellBasell Industries N.V. (LYB) |
|---|---|---|
| ROE | 1.75% | 10.91% |
| ROIC | 2.63% | 5.15% |
| P/E | 89.07 | 17.75 |
| P/B | 1.56 | 1.94 |
| Current Ratio | 1.84 | 1.83 |
| Quick Ratio | 1.32 | 1.13 |
| D/E | 0.69 | 1.04 |
| Debt-to-Assets | 33.56% | 36.15% |
| Interest Coverage | 2.51 | 3.78 |
| Asset Turnover | 0.40 | 1.13 |
| Fixed Asset Turnover | 2.65 | 2.44 |
| Payout ratio | 211.52% | 126.47% |
| Dividend yield | 2.37% | 7.13% |
| Fiscal Year | 2024 | 2024 |
Efficiency & Valuation Duel: The Vital Signs
Ratios act as a company’s DNA, uncovering hidden risks and revealing operational excellence essential for informed investment decisions.
International Flavors & Fragrances Inc.
IFF shows weak profitability with a 1.75% ROE and a slim 2.12% net margin, signaling operational challenges. Its valuation is stretched, with a P/E of 89.07, yet the 2.37% dividend yield offers some shareholder return. The firm balances modest reinvestment in R&D at 5.8% of sales, pointing to growth focus despite margin pressure.
LyondellBasell Industries N.V.
LYB’s 2025 ratios are mostly unavailable or zero, hindering direct profitability assessment. Historical data shows stronger returns with ROE peaking over 16% in prior years and a lower valuation (P/E and P/B favorable). LYB carries no dividend currently and shows mixed signals on liquidity and leverage, increasing uncertainty about shareholder returns.
Valuation Stretch vs. Data Gaps: A Cautious Balance
IFF’s stretched valuation contrasts with weak returns, while LYB’s data gaps obscure its true financial health. IFF offers clearer shareholder returns via dividends but operational risks remain. LYB may attract investors favoring potential value but requires cautious scrutiny due to incomplete metrics. Risk-averse investors may prefer IFF’s transparency, while those tolerating ambiguity might consider LYB.
Which one offers the Superior Shareholder Reward?
I compare International Flavors & Fragrances Inc. (IFF) and LyondellBasell Industries N.V. (LYB) on dividend yield, payout ratios, and buyback intensity. IFF yields 2.37% with a payout ratio above 200%, signaling unsustainability. LYB yields 7.13% with payout around 126%, backed by strong free cash flow. LYB’s buyback activity is more robust, reflecting prudent capital allocation. IFF’s elevated payout ratio and modest buybacks raise caution. LYB’s higher, well-covered dividend and active buybacks offer greater total return potential and sustainability in 2026. I favor LYB for superior shareholder reward.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of International Flavors & Fragrances Inc. (IFF) and LyondellBasell Industries N.V. (LYB):
Both IFF and LYB share identical score patterns across DCF, ROE, ROA, Debt/Equity, and Valuation metrics. Each scores very favorably on discounted cash flow, but shows very unfavorable returns on equity and assets, coupled with weak leverage and valuation scores. Neither company presents a balanced financial profile; both rely heavily on future cash flow expectations while struggling with profitability and financial risk.
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Financial Health: Quality of Operations
IFF and LYB both register average Piotroski F-Scores, with IFF at 5 and LYB at 4, signaling moderate financial health but no clear dominance:
These middling scores suggest both firms maintain adequate but not robust operational quality. Neither exhibits red flags in internal metrics, yet neither stands out as a strong value play based on financial health alone. Investors should watch for potential weaknesses in profitability and efficiency improvements.
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Bankruptcy Risk: Solvency Showdown
IFF’s Altman Z-Score of 1.28 places it in the distress zone, signaling a high bankruptcy risk in the current market cycle:
LYB’s Altman Z-Score is unavailable, preventing direct comparison. However, IFF’s low score warns investors to exercise caution, as its long-term survival faces meaningful uncertainty amid economic volatility.
How are the two companies positioned?
This section dissects IFF and LYB’s operational DNA by comparing their revenue distribution and internal dynamics—strengths and weaknesses. The goal is to confront their economic moats to reveal which model offers the most resilient competitive advantage today.
Revenue Segmentation: The Strategic Mix
The following visual comparison dissects how International Flavors & Fragrances Inc. and LyondellBasell Industries N.V. diversify their income streams and where their primary sector bets lie:
IFF’s revenue pivots around Nourish at $5.9B, anchoring its portfolio with Health & Biosciences ($2.1B) and Scent ($2.4B) adding balance. LYB dwarfs with an extensive chemical mix, led by Refined Products at $8.1B and Polyethylene at $7.6B. LYB’s broad diversification mitigates concentration risk, while IFF’s focused segments suggest deep ecosystem lock-in in flavors and biosciences. Strategically, LYB dominates infrastructure-intensive markets; IFF bets on innovation-driven specialty ingredients.
Strengths and Weaknesses Comparison
This table compares the Strengths and Weaknesses of IFF and LYB based on diversification, profitability, financials, innovation, global presence, and market share:
IFF Strengths
- Diversified product portfolio across Nourish, Pharma, Scent, Health & Biosciences
- Favorable current and quick ratios indicating liquidity
- Dividend yield at 2.37% supports shareholder returns
- Global revenue balanced across Asia, EMEA, North America, Latin America
LYB Strengths
- Broad product range including Polyethylene, Polypropylene, Refined Products
- Favorable debt metrics with low debt-to-assets
- Strong presence in major markets like the US, Germany, France
- Neutral interest coverage ratio at 4.33 suggests stable debt servicing
IFF Weaknesses
- Low profitability with net margin 2.12% and ROE 1.75% both unfavorable
- High P/E ratio of 89.07 indicates expensive valuation
- Unfavorable interest coverage at 1.91 and asset turnover at 0.4
- Slightly unfavorable overall financial ratios with 42.86% unfavorable
LYB Weaknesses
- Zero net margin, ROE, and ROIC reflect weak profitability
- Unavailable WACC limits cost of capital insights
- Unfavorable liquidity with current and quick ratios at zero
- Absence of dividend yield and unfavorable asset turnovers
Overall, IFF shows stronger liquidity and dividend support but struggles with profitability and valuation. LYB’s capital structure appears sound, yet its profitability and liquidity metrics raise caution. Both companies face distinct challenges impacting capital allocation and strategic growth.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only reliable shield protecting long-term profits from relentless competition erosion. Let’s dissect the moats of two specialty chemicals giants:
International Flavors & Fragrances Inc. (IFF): Intangible Assets Moat
IFF’s primary moat stems from its deep intangible assets—proprietary fragrance formulas and strong customer relationships. This translates into stable margins despite volatile raw material costs. However, its ROIC is declining and below WACC, signaling value destruction. New product innovation in natural and biosciences could deepen the moat if managed well.
LyondellBasell Industries N.V. (LYB): Cost Advantage Moat
LYB leverages a robust cost advantage from scale and integrated refining operations, differentiating it from IFF’s asset-light model. Though its financials show margin compression and declining earnings growth, its operational efficiency supports resilience. Expansion into advanced polymers offers potential to revitalize its competitive edge despite recent headwinds.
Intangibles vs. Scale: The Moat Strength Battle
IFF’s intangible asset moat is deep but currently undermined by declining capital returns. LYB’s cost advantage is proven but faces margin pressure and growth challenges. Between the two, I see IFF’s moat as structurally wider thanks to innovation potential, but LYB remains better positioned to defend share through scale and integration in 2026.
Which stock offers better returns?
The past year saw International Flavors & Fragrances and LyondellBasell experience notable price drops with recent gains showing early signs of recovery.
Trend Comparison
International Flavors & Fragrances’ stock fell 11.35% over 12 months, marking a bearish trend with accelerating decline and high volatility (std dev 12.8). The recent 5.97% rise signals a modest rebound.
LyondellBasell’s stock declined 50.48% over the year, a sharply bearish trend with accelerating losses and very high volatility (std dev 20.23). The recent 8.17% gain suggests a tentative recovery phase.
Comparing both, IFF’s smaller decline and recent gains indicate a stronger market performance than LYB’s steep fall despite both showing recent upward momentum.
Target Prices
Analysts present a moderately bullish consensus for these specialty chemical companies.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| International Flavors & Fragrances Inc. | 71 | 89 | 78.6 |
| LyondellBasell Industries N.V. | 36 | 51 | 45.75 |
The consensus target for IFF exceeds its current price by about 13%, signaling modest upside potential. LYB’s target consensus suggests limited gains, roughly 7% above its current price, reflecting cautious optimism.
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How do institutions grade them?
International Flavors & Fragrances Inc. Grades
The following table summarizes recent grades from major grading companies for IFF:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Argus Research | Maintain | Buy | 2026-01-22 |
| Citigroup | Maintain | Buy | 2026-01-21 |
| UBS | Maintain | Neutral | 2026-01-12 |
| Barclays | Maintain | Overweight | 2025-11-07 |
| UBS | Maintain | Neutral | 2025-11-06 |
| B of A Securities | Maintain | Buy | 2025-10-14 |
| Argus Research | Maintain | Buy | 2025-10-07 |
| UBS | Maintain | Neutral | 2025-10-06 |
| Citigroup | Maintain | Buy | 2025-10-06 |
| Mizuho | Maintain | Outperform | 2025-10-03 |
LyondellBasell Industries N.V. Grades
The following table summarizes recent grades from major grading companies for LYB:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Sector Perform | 2026-01-16 |
| Citigroup | Maintain | Neutral | 2026-01-15 |
| UBS | Maintain | Sell | 2025-12-23 |
| Wells Fargo | Downgrade | Equal Weight | 2025-12-19 |
| Citigroup | Maintain | Neutral | 2025-12-18 |
| BMO Capital | Downgrade | Underperform | 2025-12-15 |
| Mizuho | Maintain | Neutral | 2025-12-11 |
| Citigroup | Maintain | Neutral | 2025-11-19 |
| Evercore ISI Group | Maintain | In Line | 2025-11-11 |
| Wells Fargo | Maintain | Overweight | 2025-11-03 |
Which company has the best grades?
International Flavors & Fragrances Inc. consistently earns Buy and Outperform ratings from top firms, signaling stronger market confidence. LyondellBasell shows mixed to negative grades, including Sell and Underperform downgrades, reflecting cautious sentiment. This divergence may influence investor perception of risk and growth potential.
Risks specific to each company
The following categories identify the critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
International Flavors & Fragrances Inc. (IFF)
- Operates in specialty chemicals with diverse segments but faces margin pressure and low ROIC.
LyondellBasell Industries N.V. (LYB)
- Competes globally in chemicals and refining, struggling with zero profitability and weak asset turnover.
2. Capital Structure & Debt
International Flavors & Fragrances Inc. (IFF)
- Moderate leverage (D/E 0.69), neutral debt-to-assets; weak interest coverage at 1.91x signals risk.
LyondellBasell Industries N.V. (LYB)
- Favorable debt metrics reported, but lack of detailed data and weak liquidity ratios raise caution.
3. Stock Volatility
International Flavors & Fragrances Inc. (IFF)
- Beta at 1.056 suggests market-correlated volatility; stock price range moderate.
LyondellBasell Industries N.V. (LYB)
- Lower beta at 0.739 indicates less sensitivity to market swings but high volume hints at trading speculation.
4. Regulatory & Legal
International Flavors & Fragrances Inc. (IFF)
- Faces typical specialty chemicals regulation in multiple jurisdictions; no major legal red flags reported.
LyondellBasell Industries N.V. (LYB)
- Operates in refining and chemicals, exposed to stringent environmental and safety regulations globally.
5. Supply Chain & Operations
International Flavors & Fragrances Inc. (IFF)
- Complex supply chain for natural ingredients; moderate asset turnover (0.4) indicates operational inefficiencies.
LyondellBasell Industries N.V. (LYB)
- Large-scale operations with global footprint; poor asset and fixed asset turnover suggest underutilization of capacity.
6. ESG & Climate Transition
International Flavors & Fragrances Inc. (IFF)
- Focus on natural and plant-based products supports ESG positioning amid rising consumer demand.
LyondellBasell Industries N.V. (LYB)
- Refining and petrochemical operations pose significant climate transition risks and ESG pressures.
7. Geopolitical Exposure
International Flavors & Fragrances Inc. (IFF)
- Global presence across stable and emerging markets, but supply chains sensitive to regional instabilities.
LyondellBasell Industries N.V. (LYB)
- Operations span multiple continents including volatile regions, increasing geopolitical risk exposure.
Which company shows a better risk-adjusted profile?
IFF’s most impactful risk is its weak profitability and low return on invested capital, signaling operational challenges despite a solid balance sheet. LYB’s critical vulnerability is its zero profitability combined with poor liquidity and asset utilization, intensifying financial distress risk. IFF demonstrates a marginally better risk-adjusted profile due to more favorable liquidity and a diversified ESG focus. However, IFF’s Altman Z-Score in the distress zone (1.28) warns of bankruptcy risk. LYB’s lack of Altman score and zero margins underline deeper financial instability. Recent financial ratios reveal IFF’s interest coverage below 2x, spotlighting debt servicing challenges in a rising rate environment.
Final Verdict: Which stock to choose?
International Flavors & Fragrances Inc. (IFF) stands out for its strong cash generation and operational resilience in a complex sector. Its superpower lies in its solid gross margins and disciplined cost management. However, its declining return on invested capital signals a critical point of vigilance. I see it fitting aggressive growth portfolios willing to navigate cyclical volatility.
LyondellBasell Industries N.V. (LYB) impresses with its operational efficiency and tangible asset base, offering a strategic moat in petrochemicals. It provides a comparatively safer profile with better free cash flow yields and moderate leverage. LYB suits investors seeking growth at a reasonable price with an appetite for cyclical industrial exposure.
If you prioritize resilient cash flow and operational strength in consumer-oriented industries, IFF is the compelling choice despite its value erosion risk. However, if you seek industrial cyclical value with more tangible asset backing and better free cash flow, LYB offers better stability at a reasonable valuation. Both require cautious monitoring given their recent trends and sector headwinds.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of International Flavors & Fragrances Inc. and LyondellBasell Industries N.V. to enhance your investment decisions:
