Dividend Aristocrats In Focus Part 9: Air Products & Chemicals

Air Products & Chemicals (APD) is an industrial gases firm. It has been in operation for 75 years. It now has annual sales nearing $10 billion and has 17,000 employees in 50 countries around the world. The company is the largest supplier of Hydrogen & Helium gas in the world.

Air Products is a Dividend Aristocrat. It has raised its dividend for 34 years in a row. Being a Dividend Aristocrat is not arbitrary. Only stocks with 25+ consecutive years of dividend increases in the S&P 500 are eligible.  Dividend Aristocrats are high quality stocks

Not surprisingly, the Dividend Aristocrats Index has significantly outperformed the market over the last decade.

dividend-aristocrats-performance

Source:  S&P Fact Sheet

You can see the full list of all 50 Dividend Aristocrats here (along with metrics that matter for each).

Air Products stock offers a nice combination of a slightly above-average dividend yield as well as annual dividend growth rates that exceed inflation.  The company currently has a dividend yield of 2.6%.

The most recent dividend increase was 6%. Over the past five years, Air Products has averaged 8.2% compound annual dividend growth. In the past decade, the stock has delivered a 177% total return to shareholders.

Business Overview

Air Products is a diversified industrial firm.

apd-financial-highlights

Source: 2015 Annual Report, page 2

It provides atmospheric and process gases, along with the equipment used to handle these gases, to customers in a wide range of industries. Air Products’ major customers are spread across the industrial, materials, and energy sectors. It also supplies the food and beverage and electronics industries. The company has a global reach, with operations in 50 countries.

Air Products has a diversified business model. It operates several large segments, which are Merchant Gases, Tonnage Gases, Electronics and Performance Materials, and Equipment and Energy. No individual business segment comprises more than 37% of its annual revenue. In addition, the company is diversified geographically. Approximately 42% of Air Products’ revenue comes from the U.S. and Canada, and 58% is derived from outside the U.S. and Canada.

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Rhiannion Stalker 5 years ago Member's comment

Sure Dividends: Thank You very much for the excellent article. This is a watchlist stock and has gotten interesting lately.