Air Liquide is part of the strategy Ex-US International ETFs and Dividend Stocks demon portfolio. The company is the world leader in gases for industry, health and the environment. Present in 80 countries with 46,200 employees, Air Liquide combines dynamic growth, consistent performance and long-term responsibility. Air Liquide produces high value-added gases for its international customers in the fields of industry, health and the environment. Oxygen, nitrogen, hydrogen and many other gases are packaged and then distributed to the Group's customers. Air Liquide achieves sustainable performance that demonstrates the strength of the Group's development model.
During my presentation aux PEERS à Lausanne, un participant m'avait rendu attentif au fait qu'Air Liquide faisait croître son dividende de manière régulière et que son grand-père lui avait conseillé ce titre. Je suis toujours à l'affût de ce genre de conseils, surtout quand ils proviennent de vieux briscards de la bourse, amateurs ou pas. C'est en effet dans les vieilles marmites qu'on fait les meilleures soupes. Même si Air Liquide n'est pas à proprement dit un aristocrate de dividendes, puisqu'il n'augmente pas son dividende chaque année, elle a au moins le mérite de ne jamais l'abaisser. AI atteint ainsi une croissance annuelle de ses distributions de près de 10% en moyenne sur les trente dernières années.
Le rendement moyen est bon, avec 3.76%, par contre le rendement courant est plus faible, avec 2.4%. Il est vrai que le titre a pris près de 50% depuis juillet 2009. Néanmoins le dividende est couvert par un distribution ratio prudent de 45%, qui explique aussi sa relative faiblesse.
Shareholders holding their registered shares for more than 2 full calendar years benefit from the loyalty bonus, i.e. an increase of 10 % in the amount of dividends received and the number of free shares allocated. A registered shareholder who decides to purchase Air Liquide shares each year with his dividends and who benefits from the loyalty bonus and the allocation of free shares will see an average annual growth of his portfolio of 7.6 % over 5 years, 10.4 % over 10 years and 11.5 % over 20 years (Situation as of December 31, 2011, before any taxation).
Unfortunately, the procedure for becoming a registered shareholder seems complex, especially if you are not French. It does not seem possible to become an administered registered shareholder (a bit like registered shares in Switzerland, but much more administratively cumbersome). It is therefore necessary to become a pure registered shareholder, which means that the securities are registered in an account with the Air Liquide Shareholder Service. This has the advantage of offering free custody/management fees, of very limited brokerage fees to 0.18% excluding tax of the gross amount of the transaction. On the other hand, you have to fill out a multitude of papers, not to mention that it is necessary to establish a deposit of 25% by... check!!! I do not understand how we still work this way these days.
In short, I'll let you take a look at what's on the Air Liquide website about this. You'll see that it's a real gas factory, and I'm not just talking about the company's activity! If you're French, it might be interesting to become a registered shareholder. For others, everyone will judge according to their patience and their objectives. It's a shame in any case that it's so cumbersome, because this bonus system to reward loyal shareholders has something to seduce.
But let's get back to the title itself. Its volatility in CHF, with 16%, is certainly higher than that of my portfolio, but still remains quite reasonable. The beta, with only 0.55, proves that the title is not very sensitive to market variations. Moreover, with a $risk of -0.5, AI offers a fairly good protection against dollar fluctuations (compared to the Swiss franc). Its market and its domestic currency are of course not unrelated to this. However, one might have thought that Air Liquide's international exposure could have posed more of a problem for the company in competitive terms, faced with a weakening dollar.
Overall, AI gets 3 stars, which is a good risk/return ratio. The current yield is not extraordinary, but solid. The stock also offers good protection against stock and currency market risk, which is precisely the goal of my strategy. Ex-US International ETFs and Dividend Stocks. It is therefore a title to watch in the future for a possible purchase.
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Good morning,
In fact, it is very, very simple to benefit from all the advantages described above. All you have to do is:
– to buy securities by placing an order through your bank, as is usual (I don’t know what happens for a broker)
– then, once the securities have been acquired, ask your banker's "stock market" department to convert them into administered registered securities (there is a document to sign that you will find on the Air Liquide website or at your banker's). That's all!
I highly recommend this stock, certainly the best on the Parisian market.
Hello Christophe and thank you for your comment. Yes it seems simple for a French resident. But I do not believe that the administered nominative is possible for non-French people.
My father also always told me about AI as a long-term investment. Note that in France, it is possible to buy from your broker and then transfer the shares to the Nominatif Pur. The same goes for a PEA, the shares can be "blocked" in Nominatif Pur to benefit from bonuses in dividends and free shares. The company has had this policy for a very long time and accounting for free shares makes a significant difference in long-term performance. By retaining long-term shareholders, AI Management hopes to avoid a hostile takeover bid.
Thanks for your comment Yves. Shareholder loyalty also explains the relatively low volatility of the stock.
Great article for a great company. I have just opened a line at 93 EUR, which I will register in administered nominative.
You shoot faster than your shadow Lopazz 😉
We can also look at Air Products & Chemicals (APD) for example, which just corrected last Friday and which offers an interesting yield of 3.2%, a little more than AI.
(sign: an investor disappointed not to have put AI or Linde in his portfolio 10 years ago)
APD is indeed a good value too