Listen to companies that use petrochemical feedstocks in just about any business and you'll hear about how much those prices have gone up. So you might think, then, that LyondellChemical's (NYSE:LYO) stock would be doing pretty well, since it's one of the largest producers of ethylene, propylene oxide, and other chemicals. But it's not quite like that -- the stock is actually down for the past year, and analyst earnings revisions haven't been all that positive.

Seems like the folks avoiding the stock are on to something. Revenues were up a gaudy 109%, and net income was many times higher in this fourth quarter than in the year-ago fourth quarter. Nevertheless, the company missed the average estimate, and the reported earnings per share weren't even half of the published high estimate. Now, I'll grant that underlying performance may have, in fact, been better than the as-reported GAAP number, but the underperformance was still considerable.

While the ethylene business is still very strong (and showing peak margins), margins on MTBE (a gas additive) weren't so hot, and company management seems pretty uncertain as to the immediate future of this important chemical. Elsewhere, the company's refining business had a rough quarter as Hurricane Rita led to meaningful downtime.

This is a tricky stock and probably not one for too many armchair investors. There's a lot of debt here, and it carries a junk rating (although a very high junk rating). What's more, while the company pays a nice dividend, coverage of that dividend has been a bit spotty.

And that's only part of the issue. Maybe we're in the midst of a more sustained upward cycle for petrochemicals, and maybe we won't see a peak for another year or two. But is this really the way to play it? Now, by all means, if you're an expert on the basic chemicals business and you're confident that we'll soon see another move up, go ahead and buy the stock (and drop me a line explaining the how's and why's of it all).

If you're like me, though, and beginning to wonder whether the move from around $10 in late 2002 to over $35 in early January of '05 was the big move, you're probably best off sticking to the sidelines, or maybe going with a more secure idea like Motley Fool Income Investor pick Dow Chemical (NYSE:DOW).

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).