Air Products and Chemicals increases dividends

Exchange: NASD

Sector: Basic Materials

Industry: Chemicals — Major Diversifieds

Entry strategy

Price: $170–175

Stop-loss: under $154

Take profit: $212

Investment horizon: until the end of 2019

Company details

Air Products and Chemicals, Inc. produces atmospheric gases, including oxygen, nitrogen, argon, hydrogen, helium, carbon dioxide, carbon monoxide, synthetic and specialized gases.

The company also manufactures equipment for the production, processing and transportation of gases. It is used in various industries, including chemical, gasification, electronics, magnetic resonance imaging and energy.

Air Products and Chemicals, Inc. was founded in 1940 and is based in Allentown, Pennsylvania.

The main indicators of the stock:

Air Products and Chemicals share ($APD) performance. Source: Yahoo Finance

The fundamental description of the idea

There is an uncertain trend on the broad stock market. Under such conditions, stocks with good dividend yields are of particular interest.

    Air Products and Chemicals dividends are growing steadily amid continual improvement in its financial condition:

  • sustainable growth of cash and cash equivalents
  • debt declining in the capital structure,
  • high relative indicators of business performance and return on capital.

In the comments to the financial statements, the company’s management reported that it increases the size of quarterly dividends — by 5%, to $ 1.16 per share. This is 37th time when executives raise dividends on Air Products and Chemicals shares. The expected annual dividend yield of $APD shares is 2.56%, the ex-dividend date is March 29, 2019.

In the first quarter of fiscal 2019, the corporation showed higher earnings per share than in the same period of the previous year — $1.57 against $0.7.

In 2019, Air Products and Chemicals, Inc. plans to spend approximately $2.4 billion on capital expenditures. At the same time, the company’s management expects to get earnings per share in the range of $8.05–8.30 by the end of the year — about 10% higher than in 2018.

The company is relatively cheap, according to financial multipliers and DCF models. The average forecast of 20 analysts is that the share price of Air Products and Chemicals has a 5% growth potential from current levels.

Trading plan

Technical analysis of Air Products and Chemicals, Inc. stock ($APD). Source: Trading View