Air Products and Chemicals, Inc.’s (APD Quick QuoteAPD - Free Report) shares have shot up 24.3% over the past three months. The company has also outperformed its industry’s rise of 10.1% over the same time frame. It has also topped the S&P 500’s roughly 7.4% rise over the same period.

Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) company.

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What’s Going in APD’s Favor?

Air Products is gaining from higher pricing and higher volumes as witnessed in the last reported quarter. Its volumes in fourth-quarter fiscal 2022 were driven by new plants, recovery in hydrogen and improved merchant demand. The company also witnessed improved pricing in the three largest regional segments in the quarter.

The company, on 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.

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 driving 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.

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.

Air Products and Chemicals, Inc. Price and Consensus

 

Air Products and Chemicals, Inc. price-consensus-chart | Air Products and Chemicals, Inc. Quote

Stocks to Consider

Better-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS Quick QuoteZEUS - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM Quick QuoteSQM - Free Report) and Commercial Metals Company (CMC Quick QuoteCMC - 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 35% in a year.

Sociedad has a projected earnings growth rate of 553.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 3.6% upward in the past 60 days.

Sociedad has a trailing four-quarter earnings surprise of roughly 37.4%. SQM has rallied roughly 63% in a year. The company currently carries a Zacks Rank #1.

Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 8.7% 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 28% in a year.