Why Should You Add Air Products (APD) Stock to Your Portfolio
Air Products and Chemicals, Inc.'s APD stock looks promising at the moment. The industrial gas giant is well-placed for growth on its project investments, productivity actions and new business deals.
Let's see what makes this Zacks Rank #2 (Buy) stock a compelling investment option at the moment.
Estimates Northbound
Over the past two months, the Zacks Consensus Estimate for Air Products for fiscal 2024 has increased around 1.1%. The consensus estimate for fiscal 2025 has also been revised 0.6% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Healthy Growth Prospects
The Zacks Consensus Estimate for fiscal 2024 earnings is currently pegged at $12.98, implying year-over-year growth of 12.8%. Moreover, earnings are expected to register a 10% growth in fiscal 2025.
Positive Earnings Surprise History
Air Products’ earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters. It has a trailing four-quarter earnings surprise of roughly 1.1%, on average.
Superior Return on Equity (ROE)
Air Products’ ROE of 17%, as compared with the industry average of 10.9%, manifests the company’s efficiency in utilizing shareholder’s funds.
Project Investments, Productivity Drive APD
Air Products is expected to benefit from its investments in high-return industrial gas projects and productivity measures. Higher volumes and pricing are also likely to support its results.
The company remains focused on its gasification strategy and is executing its growth projects. These projects are expected to be accretive to earnings and cash flows. APD is realizing the benefits of the completion of the second phase of the Jazan project in Saudi Arabia. The company has a total available capacity to deploy (over fiscal 2023-2032) $32.5 billion in high-return investments aimed at creating significant shareholder value.
Air Products is also driving productivity to improve its cost structure. It is seeing the positive impacts of its productivity actions. Benefits from additional productivity and cost improvement programs are likely to support its margins moving ahead.
The company also remains committed to maximize returns to shareholders leveraging strong balance sheet and cash flows. APD, earlier this year, increased its quarterly dividend by 8% to $1.75 per share from $1.62 per share. This marked the 41st straight year of dividend increase. The company expects to pay roughly $1.5 billion in dividends to shareholders in 2023.
Air Products and Chemicals, Inc. Price and Consensus
Air Products and Chemicals, Inc. price-consensus-chart | Air Products and Chemicals, Inc. Quote
Stocks to Consider
Other top-ranked stocks worth a look in the basic materials space include Cameco Corporation CCJ, Alamos Gold Inc. AGI and Cabot Corporation CBT.
Cameco has a projected earnings growth rate of 156% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 6.7% over the past 60 days. The stock is up around 69% in a year. CCJ currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Alamos’ current-year earnings is pegged at 53 cents, indicating a year-over-year growth of 89.3%. AGI, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have rallied 17.8% in the past year.
The consensus estimate for Cabot’s current fiscal-year earnings is pegged at $6.58, indicating a year-over-year rise of 22.3%. CBT, carrying a Zacks Rank #2, beat the Zacks Consensus Estimate in three of the last four quarters while missed once, with the average earnings surprise being 2.3%. The company’s shares are up around 10% in the past year.
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