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Why Should You Add Air Products (APD) to Your Portfolio?
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Air Products and Chemicals, Inc.’s (APD - Free Report) stock looks promising at the moment. The company’s shares have popped around 29% year to date. The industrial gases giant is poised for growth on the back of its project investments, new business deals and acquisitions.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let's see what makes this Zacks Rank #2 (Buy) stock a compelling investment option at the moment.
Price Performance
Air Products has outperformed the industry it belongs to over a year. The company’s shares have gained 24% compared with roughly 32.8% decline recorded by the industry.
Estimates Going Up
Earnings estimate revisions have the greatest impact on stock prices. Estimates for fiscal 2019 for Air Products have moved north over the past month. Over this period, the Zacks Consensus Estimate for the year has moved up around 0.5%. The Zacks Consensus Estimate for fiscal 2020 has also increased roughly 0.5% over the same timeframe.
Healthy Growth Prospects
The Zacks Consensus Estimate for earnings for fiscal 2019 of $8.22 for Air Products reflects an expected year-over-year growth of 10.3%. Moreover, earnings are expected to register a 13.4% growth in fiscal 2020. The company also has an expected long-term earnings per share growth of 11.8%.
Superior Return on Equity (ROE)
Air Products’ ROE of 15.3%, as compared with the industry average of 9.9%, manifests the company’s efficiency in utilizing shareholder’s funds.
Upbeat Outlook
Air Products, in its second-quarter fiscal 2019 call, raised adjusted earnings per share guidance for fiscal 2019 to the range of $8.15-$8.30 from the previous expectation of $8.05-$8.30. This suggests 10% rise year over year at the midpoint.
The company also expects adjusted earnings for third-quarter fiscal 2019 in the band of $2.10-$2.15 per share, which indicates 8-10% rise year over year.
Growth Drivers in Place
Air Products’ strategic investments in high-return projects, productivity actions and contributions of acquisitions should drive its fiscal 2019 results. The Lu'An syngas project in China, which is now fully onstream, contributed to the results in the company’s Industrial Gases – Asia segment in the fiscal second quarter. The company expects the Lu'An project to contribute more than 25 cents per share to its earnings in fiscal 2019.
Air Products has a total available capacity to deploy (over fiscal 2018-2022) roughly $16 billion in high-return investments, aimed at creating significant shareholder value. The company has already spent or committed more than half of this capacity.
Earlier this year, the company also completed the buyout of ACP Europe SA, which is the largest independent carbon dioxide business in Continental Europe. The buyout enables the company to serve existing customers better and tap new industrial gas growth opportunities. Air Products noted that the acquisition provides it a strong platform to pursue further industrial gas growth in Europe and deliver value to customers.
Air Products also remains committed to boost productivity to improve its cost structure. The company is seeing positive impact of its productivity actions and expects to benefit from additional productivity and cost improvement programs in fiscal 2019.
Air Products and Chemicals, Inc. Price and Consensus
Other top-ranked stocks worth considering in the basic materials space include Materion Corporation (MTRN - Free Report) , AngloGold Ashanti Limited (AU - Free Report) , and Innospec Inc. (IOSP - Free Report) .
Materion has an expected earnings growth rate of 23.1% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have gained around 16% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
AngloGold has an expected earnings growth rate of 86.8% for the current year and carries a Zacks Rank #1. Its shares have rallied 43% in a year’s time.
Innospec has an expected earnings growth rate of 6.6% for the current year and carries a Zacks Rank #2. Its shares are up roughly 7% in the past year.
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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Why Should You Add Air Products (APD) to Your Portfolio?
Air Products and Chemicals, Inc.’s (APD - Free Report) stock looks promising at the moment. The company’s shares have popped around 29% year to date. The industrial gases giant is poised for growth on the back of its project investments, new business deals and acquisitions.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let's see what makes this Zacks Rank #2 (Buy) stock a compelling investment option at the moment.
Price Performance
Air Products has outperformed the industry it belongs to over a year. The company’s shares have gained 24% compared with roughly 32.8% decline recorded by the industry.
Estimates Going Up
Earnings estimate revisions have the greatest impact on stock prices. Estimates for fiscal 2019 for Air Products have moved north over the past month. Over this period, the Zacks Consensus Estimate for the year has moved up around 0.5%. The Zacks Consensus Estimate for fiscal 2020 has also increased roughly 0.5% over the same timeframe.
Healthy Growth Prospects
The Zacks Consensus Estimate for earnings for fiscal 2019 of $8.22 for Air Products reflects an expected year-over-year growth of 10.3%. Moreover, earnings are expected to register a 13.4% growth in fiscal 2020. The company also has an expected long-term earnings per share growth of 11.8%.
Superior Return on Equity (ROE)
Air Products’ ROE of 15.3%, as compared with the industry average of 9.9%, manifests the company’s efficiency in utilizing shareholder’s funds.
Upbeat Outlook
Air Products, in its second-quarter fiscal 2019 call, raised adjusted earnings per share guidance for fiscal 2019 to the range of $8.15-$8.30 from the previous expectation of $8.05-$8.30. This suggests 10% rise year over year at the midpoint.
The company also expects adjusted earnings for third-quarter fiscal 2019 in the band of $2.10-$2.15 per share, which indicates 8-10% rise year over year.
Growth Drivers in Place
Air Products’ strategic investments in high-return projects, productivity actions and contributions of acquisitions should drive its fiscal 2019 results. The Lu'An syngas project in China, which is now fully onstream, contributed to the results in the company’s Industrial Gases – Asia segment in the fiscal second quarter. The company expects the Lu'An project to contribute more than 25 cents per share to its earnings in fiscal 2019.
Air Products has a total available capacity to deploy (over fiscal 2018-2022) roughly $16 billion in high-return investments, aimed at creating significant shareholder value. The company has already spent or committed more than half of this capacity.
Earlier this year, the company also completed the buyout of ACP Europe SA, which is the largest independent carbon dioxide business in Continental Europe. The buyout enables the company to serve existing customers better and tap new industrial gas growth opportunities. Air Products noted that the acquisition provides it a strong platform to pursue further industrial gas growth in Europe and deliver value to customers.
Air Products also remains committed to boost productivity to improve its cost structure. The company is seeing positive impact of its productivity actions and expects to benefit from additional productivity and cost improvement programs in fiscal 2019.
Air Products and Chemicals, Inc. Price and Consensus
Air Products and Chemicals, Inc. price-consensus-chart | Air Products and Chemicals, Inc. Quote
Other Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Materion Corporation (MTRN - Free Report) , AngloGold Ashanti Limited (AU - Free Report) , and Innospec Inc. (IOSP - Free Report) .
Materion has an expected earnings growth rate of 23.1% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have gained around 16% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
AngloGold has an expected earnings growth rate of 86.8% for the current year and carries a Zacks Rank #1. Its shares have rallied 43% in a year’s time.
Innospec has an expected earnings growth rate of 6.6% for the current year and carries a Zacks Rank #2. Its shares are up roughly 7% in the past year.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>