Down 25% Plus 40 Years Of Growing Dividends – Buying Air Products & Chemicals Stock?

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Boring. Steady. Performing. This all describes the stock we're looking at today. This high dividend growth rate stock is down 25% so far in 2022. This dividend growth stock has also increased their dividend for over 40 years. Time to take a look at Air Products & Chemicals (APD) to see if this is a stock to buy now.

Air Products & Chemicals Stock

Air Products & Chemicals stock has dropped almost $100 in stock price. The 52-week high sits at $316. APD, as you can see above, closed Friday at a stock price of $219.38. Roughly $5 away from a $100 stock price drop on this amazingly boring, yet wonderful dividend growth stock.

Having increased their dividend for 40+ years, they are a staple in the dividend investing community. Those on the journey to financial freedom, whom want to buy boring dividend stocks, may want to buy APD stock.

Since 1982, APD stock is up an astonishing 5,900% -- or 140% on average over a 40-year period. Not too bad, right?

A nice run up over the last 40 years, indeed. The company has been around for almost 85 years and they are based next door to Ohio, in Allentown, PA. APD sells gas and chemicals. Although it’s boring, the company crushes it out there. We’ll get into the stock metrics here shortly, but the appreciation above is no joke.

You know what else is no joke as a dividend stock investor? The dividend history. Check out this chart:

Paying approximately $1.62 per share, they have come a long way.

APD Dividend Stock Analysis

As you know it’s time to review APD with our Dividend Diplomat Stock Screener. Here, we focus on 3 main dividend stock metrics:

  1. Price to Earnings Ratio (P/E): We look for the price to earnings ratio < the S&P 500 and the competition.
  2. Dividend Payout Ratio: The preferred dividend payout ratio is < 60%. In fact, we believe the perfect payout ratio is between 40% and 60%.
  3. Dividend Growth Rate: Given we are dividend investing, we look at the five-year dividend growth rate. In addition, we review how many years the company has increased their dividend.

  1. P/E Ratio: APD has a price to earnings ratio, as of the time of writing, of approximately 18.94. This is under the S&P 500 p/e ratio of 25x earnings. Decent value here. This is not significantly undervalued by any means, but APD rarely trades at these levels.
  2. Dividend Payout Ratio: A perfect dividend payout ratio at 55%. They are right in that sweet spot of 40-60%. APD stock is perfect here.
  3. Dividend Growth Rate: First, they’ve increased their dividend from $1.50 to $1.62 or 8%. Their five-year average is a blistering 11.83%. APD stock has grown their dividend for 40 years, too.

Lastly, we’ll take a look at the dividend yield. As an investor, you'll want to know how much owning this dividend stock pays you now. The yield for APD is 2.92%. Almost at 3%, which is significantly higher than the five-year dividend yield average of 2.30%. This is also 2x the S&P 500 dividend yield.

Is APD a Dividend Stock to Buy Now?

Now that we’ve gone through the metrics, is APD a stock to buy for our dividend stock portfolio? If you have no exposure to the chemicals/gas part of the stock market, I couldn’t think of a more perfect stock to buy.

I currently own LyondellBasell (LYB) already. Therefore, I have a significant foot in the industry within my dividend stock portfolio. If I had less exposure, I would certainly add Air Products & Chemicals.

Disclaimer: I do not recommend any decision to the reader or any user, please consult your own research. Thank you.

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