Air Products and Chemicals, Inc.’s (APD - Free Report) shares have popped 24% over the past six months. The company has also outperformed its industry’s decline of 2.5% over the same time frame. It has also topped the S&P 500’s roughly 4.4% decline over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) company.
What’s Aiding APD?
Air Products is benefiting from investments in high-return projects, new business deals, acquisitions and productivity initiatives. It remains committed to its gasification strategy and is executing its growth projects. These projects are expected to be accretive to earnings and cash flows.
The company has a total available capacity to deploy (over fiscal 2018-2027) around $36.5 billion in high-return investments aimed at creating significant shareholder value. It has already spent or committed roughly 73% of the capacity.
Air Products is also boosting productivity to improve its cost structure. It is seeing the positive impacts of its productivity actions. Benefits from additional productivity and cost improvement programs are likely to support its margins moving ahead. Air Products also has been benefiting from higher pricing. Higher merchant demand is also driving its volumes.
The company’s volumes, in fourth-quarter fiscal 2022 (ended Sep 30, 2022), were driven by new plants, recovery in hydrogen and improved merchant demand. It witnessed improved pricing in the three largest regional segments in the quarter.
Air Products, in its fourth-quarter call, said that it expects full-year fiscal 2023 adjusted earnings per share of $11.20-$11.50, indicating a 9-12% year-over-year growth. For the first quarter of fiscal 2023, the company expects adjusted earnings per share in the range of $2.60 -$2.80, suggesting a rise of 5-13% from the year-ago quarter.
The company also remains committed to maximize returns to shareholders leveraging strong balance sheet and cash flows. The company, earlier this year, increased its quarterly dividend by 8% to $1.62 per share from $1.50 per share. This marked the 40th straight year of dividend increase. The company expects to pay more than $1.4 billion of dividend to shareholders in calendar 2022.
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Commercial Metals Company (CMC - Free Report) and Steel Dynamics, Inc. (STLD - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 65% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 13.8% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 51% in a year.
Steel Dynamics has a projected earnings growth rate of 36.1% for the current year. The Zacks Consensus Estimate for STLD’s current-year earnings has been revised 7.3% upward in the past 60 days.
Steel Dynamics has a trailing four-quarter earnings surprise of roughly 6.2%. STLD has rallied roughly 77% in a year. The company currently carries a Zacks Rank #2 (Buy).
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Air Products and Chemicals, Inc.’s (APD - Free Report) shares have popped 24% over the past six months. The company has also outperformed its industry’s decline of 2.5% over the same time frame. It has also topped the S&P 500’s roughly 4.4% decline over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) company.
What’s Aiding APD?
Air Products is benefiting from investments in high-return projects, new business deals, acquisitions and productivity initiatives. It remains committed to its gasification strategy and is executing its growth projects. These projects are expected to be accretive to earnings and cash flows.
The company has a total available capacity to deploy (over fiscal 2018-2027) around $36.5 billion in high-return investments aimed at creating significant shareholder value. It has already spent or committed roughly 73% of the capacity.
Air Products is also boosting productivity to improve its cost structure. It is seeing the positive impacts of its productivity actions. Benefits from additional productivity and cost improvement programs are likely to support its margins moving ahead. Air Products also has been benefiting from higher pricing. Higher merchant demand is also driving its volumes.
The company’s volumes, in fourth-quarter fiscal 2022 (ended Sep 30, 2022), were driven by new plants, recovery in hydrogen and improved merchant demand. It witnessed improved pricing in the three largest regional segments in the quarter.
Air Products, in its fourth-quarter call, said that it expects full-year fiscal 2023 adjusted earnings per share of $11.20-$11.50, indicating a 9-12% year-over-year growth. For the first quarter of fiscal 2023, the company expects adjusted earnings per share in the range of $2.60 -$2.80, suggesting a rise of 5-13% from the year-ago quarter.
The company also remains committed to maximize returns to shareholders leveraging strong balance sheet and cash flows. The company, earlier this year, increased its quarterly dividend by 8% to $1.62 per share from $1.50 per share. This marked the 40th straight year of dividend increase. The company expects to pay more than $1.4 billion of dividend to shareholders in calendar 2022.
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Commercial Metals Company (CMC - Free Report) and Steel Dynamics, Inc. (STLD - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 65% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 13.8% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 51% in a year.
Steel Dynamics has a projected earnings growth rate of 36.1% for the current year. The Zacks Consensus Estimate for STLD’s current-year earnings has been revised 7.3% upward in the past 60 days.
Steel Dynamics has a trailing four-quarter earnings surprise of roughly 6.2%. STLD has rallied roughly 77% in a year. The company currently carries a Zacks Rank #2 (Buy).
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