Madison Funds, managed by Madison Asset Management, LLC, released its “Madison Diversified Income Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. The fund returned -8.51% during the second quarter, outperforming its blended benchmark return of -10.45%. The S&P 500 Index returned -16.10%, while the ICE BofA US Corp. Govt. & Mtg Index returned -4.62%. In addition, you can check the top 5 holdings of the fund to learn about its best picks in 2022.
Madison Funds discussed stocks like Air Products and Chemicals, Inc. (NYSE:APD) in the second quarter investor letter. Headquartered in Allentown, Pennsylvania, Air Products and Chemicals, Inc. (NYSE:APD) is a supplier of gases and chemicals for industrial uses. On September 21, 2022, Air Products and Chemicals, Inc. (NYSE:APD) stock closed at $241.46 per share. One-month return of Air Products and Chemicals, Inc. (NYSE:APD) was -8.09% and its shares lost 6.39% of their value over the last 52 weeks. Air Products and Chemicals, Inc. (NYSE:APD) has a market capitalization of $53.556 billion.
Here is what Madison Funds specifically said about Air Products and Chemicals, Inc. (NYSE:APD) in its Q2 2022 investor letter:
“This quarter we are highlighting Air Products and Chemicals, Inc. (NYSE:APD) as a relative yield example in the Materials sector. APD is a leading global industrial gas supply company and is the largest supplier of hydrogen and helium in the world. It has a sustainable competitive advantage due to long-term customer relationships and contracts, high customer switching costs, and the missioncritical nature of its products. Industrial gases are a relatively small fraction of customers’ overall costs but are crucial to ensure uninterrupted production.
Our thesis on APD is that it appears well-positioned for consistent double-digit growth due to a large multi-year capital allocation plan, and the need for accelerating capital expenditures by its customers. It has a $25 billion backlog driven by traditional gas investments along with new growth opportunities like gasification, green hydrogen, and carbon capture. APD’s gasification technologies help improve energy efficiency and independence, which is a key focus for its customers. The company also has a strong management team with a record of expanding margins and exemplary capital allocation.
The fund purchased APD in June 2022 at $260. At the time of purchase, APD had a dividend yield of 2.6% and a relative dividend yield of 1.6x the S&P 500, which was near the high end of its historical range. The chart below shows the long-term dividend yield and relative dividend yield of the stock. The company has an A-rated balance sheet by Standard & Poor’s and is a Dividend Aristocrat that has raised its annual dividend 40 years in a row. Over the past five years, APD has increased its dividend an average of 11.5% per year. We expect similar dividend increases in the future which would help grow income and protect against the impact of inflation…” (Click here to read full text)
Copyright: mikkolem / 123RF Stock Photo
Air Products And Chemicals, Inc. (NYSE:APD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Air Products and Chemicals, Inc. (NYSE:APD) at the end of the first quarter which was 39 in the previous quarter.
We discussed Air Products and Chemicals, Inc. (NYSE:APD) in another article and shared ClearBridge Investments’ views on the company. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.
Disclosure: None. This article is originally published at Insider Monkey.
