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Air Products (APD) Gains on Project Investment & Productivity

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We issued an updated research report on Air Products and Chemicals, Inc. (APD - Free Report) on Apr 9.

The company’s productivity actions, investments in high-return projects and new project wins are expected to drive its fiscal 2020 results. New projects are contributing to its volume growth.

The company is poised for growth on the back of its project investments. Notably, its latest project in the United States, which is worth $500 million, showcases its core strengths and capabilities for supplying nitrogen from an air separation unit and hydrogen from a steam methane reformer. This marks Air Products' largest investment so far in the United States. The project will likely boost the size and supply capacity of the company’s extensive hydrogen pipeline system in the Gulf Coast.

Air Products has a total available capacity to deploy (over fiscal 2018-2022) more than $18 billion in high-return investments, aimed at creating significant shareholder value. It has already spent or committed more than half of the capacity.

The company is also boosting productivity to improve its cost structure. It is seeing positive impacts of its productivity actions, and is expected to benefit from additional productivity and cost-improvement programs in fiscal 2020. Reportedly, the cost reduction actions of the company are expected to drive synergies.

Air Products also remains focused on maximizing returns to shareholders. Notably, the company generated around $2.7 billion of distributable cash flow during fiscal 2019, marking an increase of roughly 20% from fiscal 2018 levels. The distributable cash flow allowed the company to pay around 40% as dividends to shareholders. Early this year, its board increased its quarterly dividend by more than 15% to $1.34 per share from $1.16, marking the largest dividend hike in its history. This also marks the 38th straight year of a dividend increase.

Air Products and Chemicals, Inc. Price and Consensus

 

Air Products and Chemicals, Inc. Price and Consensus

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

Zacks Rank & Other Stocks to Consider

Air Products currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are DRDGOLD Limited (DRD - Free Report) Franco-Nevada Corporation (FNV - Free Report) and Barrick Gold Corporation (GOLD - Free Report) .

DRDGOLD has a projected earnings growth rate of 562.5% for 2020. The company’s shares have surged 294.6% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Franco-Nevada has a projected earnings growth rate of 15.9% for 2020. It currently carries a Zacks Rank #2. The company’s shares have rallied 52.8% in a year.

Barrick Gold currently has a Zacks Rank #2 and a projected earnings growth rate of 41.2% for 2020. The company’s shares have gained 65.2% in a year.

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