Both the FTSE 100 and the S&P 500 have shares with eye-catching yields right now. And investors looking for long-term passive income should take a closer look at both. 

LyondellBasell Industries

At 9.5%, LydonellBasell Industries (NYSE:LYB) has the highest dividend yield in the S&P 500. And it’s a classic one for investors – the yield is up because the stock is down, so is the dividend safe?

The firm is a chemicals business that’s in a downturn. Weak demand due to faltering industrial activity has compressed margins, but the bigger issue has been supply competition from China. 

Over the last 12 months, the company’s free cash flow has been nowhere near enough to cover its dividend. And that means there’s a real risk of lower distributions – and the market knows it. 

A dividend cut isn’t guaranteed though, and there are reasons for positivity. One is that there are signs of a recovery in US industrial activity coming from January’s ISM Manufacturing PMI data.

Source: Trading Economics

The figure came in at 52.6, which is its highest level in three years and a strong sign of growth. And to add extra weight to this, the supply side of the equation is starting to improve in China.

Tax policy has actually forced some of China’s less efficient operations to shut down, reducing competition. Given this, I think the 9.5% dividend yield is definitely worth a closer look.

Admiral

From the FTSE 100, Admiral (LSE:ADM) is a very different case. The £2.36 per share the firm returned in 2025 is an 8.3% yield at today’s prices, but that’s definitely going to be lower in 2026.

The company has announced a shift in its capital allocation policy. Instead of issuing new shares to fund employee compensation, it’s going to use the special dividend to finance this. 

That’s going to mean cash returns are lower going forward. But it doesn’t represent a sense in which the business is fundamentally any worse – in fact, it might be the opposite.

Buying its own shares instead of paying dividends might be more tax-efficient for investors. And the company’s core strength is the profitability of its underwriting, which isn’t affected by the change.

One risk is that the UK car insurance industry is under pressure right now. Higher repair prices and lower premiums are set to weigh on margins, which is why analysts have been downgrading the stock.

They might be right, but I think Admiral is in a better position to cope with a downturn than most. And while income investors might want to look elsewhere, I’ve started buying the stock in my ISA.

High yields, high risk?

Warren Buffett’s point that investors pay a high price for a cheery consensus is absolutely true of dividend stocks. High yields almost always reflect concern about the underlying business.

Sometimes though, the concern can be unjustified due to a short-term issue that the market is unable to see past. And when that happens, investors can find rare and lucrative investment opportunities.

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But there’s one US stock which, based on amounts paid over the past 12 months, is currently yielding 12.5%. Lyondellbasell Industries (NYSE:LYB) isn’t a household name on this side of the Atlantic but the chemical company has established a reputation for being one of the most reliable dividend payers around.

Since 2015, it’s increased its payout every year. In cash terms, it’s now 64% higher than it was 10 years ago. As the table below shows, over the past decade, the stock’s always offered a reasonable yield.

From 2016-2023, at the end of each year it was in a range of 3.4%-5.7%. But in 2023, the company’s share price started to fall. This pushed its yield higher still. Now, it’s the highest on the index. But is this a cause for concern rather than something to get excited about? Let’s try and find out.

Delving deeper

Lyondellbasell has been in business for over 70 years and sells itself as “one of the world’s largest producers of polymers and a leader in polyolefin technologies”. Its products are used in a wide variety of applications including the car industry (to help improve fuel efficiency), food manufacturing (packaging), and paint.

But there’s an over-supply of polyolefin at the moment, which is putting pressure on prices. When reporting its third quarter results this year, the group revealed a $1.2bn write down in the value of some of its European businesses due to “the prolonged downturn in the European petrochemical and global automotive industries”.

As you’d expect, to help preserve cash, the company’s been cutting costs, delayed some of its larger capital projects, and is looking to sell some of its under-performing assets.

However, despite this, it looks to me as though the long-term fundamentals of the markets in which it operates are strong. High-performance polymers will be needed to support the anticipated growth in renewable energy projects and data centres. Electric vehicles use 10% more plastic by weight than those powered by internal combustion engines.

Encouragingly, there are early signs that demand could be picking up. In North America and Europe, 2025 demand for polyethylene was at its highest since the start of the downturn in 2022. And due to its strong balance sheet, Lyondellbasell has the financial firepower to be able to wait for a recovery. This also means it’s in a good position to capitalise should the plastics market recover as anticipated.

Of course, there are no guarantees here. And uncertainties over US trade policy could also throw a spanner in the works.

But on balance, despite the industry risks, I think Lyondellbasell Industries is a stock deserving consideration at least. Even if it had to cut its dividend substantially while waiting for a recovery in global markets, its yield would still be far higher than the majority of its S&P 500 peers.

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