Air Products and Chemicals (NYSE:APD)

Air Products is an American industrial group of international scope, specializing in industrial and medical gases. Air Products provides its customers with a portfolio of bulk gases, mini tanks, frames or cylinders. Intended for the industrial, health, environmental and energy sectors, these can be food gases, specialty gases, medical and pharmaceutical gases, welding and cutting gases, but also equipment and services. The Air Products company is present in 40 countries and employs 18,900 people worldwide.

Air Products was founded by Leonard P. Pool in 1940 in Detroit on the principle of "Production at the point of consumption". The idea was originally applied to the production of oxygen. The gas was sold compressed in cylinders that weighed five times more than the gas they contained. Air Products proposed building production plants next to consumer businesses, which greatly reduced distribution costs. In 2009, Air Products was ranked 248th on the Fortune 500 list, just one spot above Praxair, one of its main competitors (Source Wikipedia).

The company offers a current yield of 2.40%, just above the average of the last five years (2.34%). annual dividend growth is correct, without being extraordinary, at 8.97%. More interestingly, this one could be increased for 28 consecutive years. The distribution ratio is particularly cautious, at 40.67%, leaving plenty of room for Air Products to further increase its dividend in the future, even in the event of a difficult passage. This is partly due to the average growth in distributions in recent years, but above all by a good progression of earnings per share for a year.

Air Products has performed very well over the past ten years, clearly beating the market. The PER is affected, since it stands at 18.00, even if it is lower than that of the chemical industry and is within the historical norm. The excellent performance of the stock also comes at the expense of increased risk, with a beta of 1.15 and a volatility in CHF of 15.03%. This is more than most of the stocks in our portfolio, but it remains manageable for many investors. This volatility can be seen during the concomitant fall in the market in 2008, but in return the title recovered very well from 2009.

Located in the chemical industry, raw materials sector, Air Products also offers a good resistance to dollar fluctuations.

An average yield, coinciding with a slightly high PER, decent growth but nothing more, an interesting history of increasing dividends, a prudent distribution ratio but fairly high volatility and finally good resistance to variations in the greenback. Air Products is a stock worthy of interest, but a little too expensive at present considering the risk incurred and the expected benefits.