I want to tell you about a high-quality stock that pays big, growing, reliable dividends. These growing dividends are funded by growing profit, because this business is producing and supplying industrial gases.

The stock looks undervalued right now. Price is what you pay. But value is what you get.

Air Products & Chemicals, Inc. - stock ticker 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 $56 billion (by market cap) industrial gases behemoth that employs approximately 19,000 people.

I valued shares using a dividend discount model analysis. I factored in a 10% discount rate and a long-term dividend growth rate of 8%. This DGR is at the very high end of what I ordinarily allow for. The DDM analysis gives me a fair value of $324.00. I find it to be a fairly accurate way to value dividend growth stocks.

Morningstar rates APD as a 3-star stock, with a fair value estimate of $305.00.

CFRA rates APD as a 5-star "STRONG BUY", with a 12-month target price of $320.00.

We have a fairly tight consensus here. Averaging the three numbers out gives us a final valuation of $316.33, which would indicate the stock is possibly 25% undervalued.

Here's the bottom line, guys: Air Products & Chemicals, Inc. is an ultra high-quality company that is one of the best dividend stocks and positioned to take advantage of both short-term growth catalysts and secular growth tailwinds. With a market-beating dividend, almost 40 consecutive years of dividend raises, a well-covered dividend, consistent double-digit dividend growth, and the potential that shares are 25% undervalued, this stock should be carefully considered by every dividend growth investor as one of the best stocks to buy now.

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