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Air Products and Chemicals, Inc.'s APD stock looks promising at the moment. 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.
Air Products, a Zacks Rank #2 (Buy) stock, has outperformed the industry it belongs to over a year. The company’s shares have moved up around 9.4% over this period, compared with roughly 7.7% growth recorded by the industry.
Let’s delve deeper into the factors that make this industrial gas giant an attractive investment option.
What's Working in Favor of APD?
Upbeat Outlook: Air Products, in April, raised its earnings outlook for fiscal 2018 factoring in the expected contribution from the Lu'An syngas project in China. The company now expects its adjusted earnings to be in the range of $7.25 to $7.40 per share (a 15-17% increase from the prior year), up from its earlier view of $7.15-$7.35 per share.
Moreover, the company expects adjusted earnings to be in the band of $1.80 to $1.85 per share for the fiscal third quarter, up 9-12% year over year.
Air Products has built a strong project backlog. These projects are anticipated to be accretive to earnings and cash flow over the next few years. It will also benefit from its actions to cut operational costs. Moreover, strategic investments in high-return projects, new business deals and acquisitions are likely to drive fiscal 2018 results.
Positive Earnings Surprise History: Air Products has an impressive earnings surprise history. It has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 4.2%.
Estimates Northbound: Annual estimates for Air Products have moved north over the past three months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for fiscal 2018 has increased by around 0.7% to $7.37 per share. The Zacks Consensus Estimate for fiscal 2019 has also moved up 1.1% over the same timeframe to $8.06.
Superior Return on Equity (ROE): Air Products’ ROE of 15%, as compared with the industry average of 9.2%, manifests the company’s efficiency in utilizing shareholder’s funds.
Healthy Growth Prospects: The Zacks Consensus Estimate for earnings for fiscal 2018 for Air Products is currently pegged at $7.37, reflecting an expected year-over-year growth of 16.8%. Moreover, earnings are expected to register a 9.4% growth in fiscal 2019. The company also has an expected long-term earnings per share growth of 16.3%, higher than the industry average of 10.1%.
Air Products and Chemicals, Inc. Price and Consensus
Air Products and Chemicals, Inc. Price and Consensus | Air Products and Chemicals, Inc. Quote
Other Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Westlake Chemical Corporation WLK, The Chemours Company CC and FMC Corporation FMC, each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have rallied roughly 63% over a year.
Chemours has an expected long-term earnings growth rate of 15.5%. The company’s shares have rallied around 21% in a year.
FMC has an expected long-term earnings growth rate of 14.3%. Its shares have gained roughly 18% over a year.
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