The higher the stock market goes, the more I like to focus on quality stocks. If a storm approaches, you want to make sure you’ve got great businesses in your portfolio. It’s all about having a strong foundation.

Because if the foundation is weak, volatility could cause a toppling. But if great businesses comprise your portfolio’s foundation, it should hold up against any tempest. When I think of great businesses, high-quality dividend growth stocks immediately come to mind. These stocks represent equity in world-class enterprises that pay reliable, rising dividends to shareholders.

They’re able to pay those reliable, rising dividends because they’re producing reliable, rising profits. Air Products & Chemicals, Inc. (APD) is a major global producer and supplier of industrial gases. They’re the largest supplier of hydrogen and helium in the world. Founded in 1940, Air Products & Chemicals is now a $64 billion (by market cap) industrial gases giant that employs more than 19,000 people. The company’s FY 2020 sales were reported through four Industrial Gases business segments organized by geography: Americas, 41%; Asia, 31%; EMEA, 22%; and Global, 4%. Corporate and other accounted for the remaining 2%. As things stand, this is a Dividend Aristocrat with 39 consecutive years of dividend increases. The 10-year dividend growth rate is 10.3%. That double-digit dividend growth comes on top of the stock’s market-beating yield of 2.06%. And with the payout ratio at 66.4%, based on midpoint adjusted EPS guidance for this fiscal year, the dividend remains easily covered. CFRA rates APD as a 5-star “STRONG BUY”, with a 12-month target price of $341.00. I came in almost on the nose with Morningstar, but the overall consensus this time around is tight. Averaging the three numbers out gives us a final valuation of $329.33, which would indicate the stock is possibly 13% undervalued.

Bottom line: Air Products & Chemicals, Inc. (APD) is a high-quality company that benefits from the powerful one-two punch of providing low-cost but critical manufacturing input material within the framework of a global oligopoly. Carbon capture and hydrogen mobility only adds to the appeal. With a market-beating yield, double-digit dividend growth, 39 consecutive years of dividend raises, and the potential that shares are 13% undervalued, this Dividend Aristocrat should be on every dividend growth investor’s radar.

Video Length: 00:11:32