Air Products & Chemicals, Inc. (NYSE:APD) is an industry leader. The company is the largest supplier of hydrogen and helium gas in the world.
Air Products also enjoys a considerable level of support from smart money investors. According to our data, 77 of some of the world’s best money managers own shares of the company as of the end of September, amassing nearly 29% of its outstanding stock. Bill Ackman of Pershig Square is one of the Air Products’ biggest fans, holding 20.55 million shares of the company, according to Pershing Square’s latest 13F filing.
The infographic below shows the size and history of APD:
Source: December 2015 Citi Presentation, slide 3
The company also supplies oxygen and nitrogen, among other atmospheric, process, and specialty gases.
APD Dividend Analysis
APD has increased its dividend payments for 38 consecutive years, making it a Dividend Aristocrat.
The image below shows the company’s dividend history since 1983
APD currently has a payout ratio of about 50%. The company’s reasonable payout ratio, long dividend streak, and stable business model (which will be discussed later in this article) make it very likely APD will continue paying rising dividends.
The company currently has a dividend yield of 2.6%, which is about 0.5 percentage points higher than the S&P 500’s current dividend yield of 2.1%.
The company’s dividend yield has fluctuated between a low of 1.3% and a high of 4.2% since 1983:
APD’s yield rarely rises above 3%. The company’s average dividend yield over the last ~30 years is 2.2%; APD is trading a bit above its historical average dividend yield at current prices.
APD’s operations are divided into four segments. The percentage of total adjusted EBITDA each segment generates is show below:
– Industrial Gases – Americas: 42% of adjusted EBITDA
– Industrial Gases – EMEA: 19% of adjusted EBITDA*
– Industrial Gases – Asia: 21% of adjusted EBITDA
– Materials Technologies: 19% of adjusted EBITDA
*Note: EMEA stands for Europe, Middle East, & Africa
The company’s operations are well diversified internationally.
The image below shows APD’s EBITDA by region. As you can see, the company generates more EBITDA outside North America than inside North America:
Source: December 2015 Citi Presentation, slide 6