A Comprehensive Analysis of the Dividend Yield, Growth, and Sustainability of Air Products & Chemicals Inc (APD, Financial)
Air Products & Chemicals Inc (APD) has recently announced a dividend payment of $1.75 per share, scheduled to be paid out on 2023-11-13, with an ex-dividend date set for 2023-09-29. This news has sparked interest among investors, leading to a surge in discussions around the company's dividend history, yield, and growth rates. In this article, we will use data from GuruFocus to delve into Air Products & Chemicals Inc's dividend performance and evaluate its sustainability.
About Air Products & Chemicals Inc
Founded in 1940, Air Products & Chemicals Inc has grown to become a global leader in industrial gas supply, with operations spanning 50 countries and a workforce of 19,000. The company holds the title of the world's largest supplier of hydrogen and helium. With a diverse portfolio, it serves customers across various industries, including chemicals, energy, healthcare, metals, and electronics. In fiscal 2022, Air Products generated $12.7 billion in revenue.
Air Products & Chemicals Inc's Dividend History
Since 1983, Air Products & Chemicals Inc has consistently paid out dividends, currently on a quarterly basis. The company has increased its dividend every year since 1983, earning it the prestigious title of a dividend aristocrat. This honor is bestowed upon companies that have consistently increased their dividends for at least 40 consecutive years.
Dividend Yield and Growth of Air Products & Chemicals Inc
At present, Air Products & Chemicals Inc boasts a 12-month trailing dividend yield of 2.36% and a 12-month forward dividend yield of 2.45%, indicating anticipated dividend growth in the next 12 months.
Over the past three years, the company's annual dividend growth rate was 11.60%. This rate decreased slightly to 11.40% per year over a five-year period. Over the past decade, the annual dividends per share growth rate stands at 9.70%. Given these figures, the 5-year yield on cost of Air Products & Chemicals Inc stock is approximately 4.05% as of today.
Assessing Dividend Sustainability
To gauge the sustainability of dividends, it's crucial to consider the company's payout ratio. The dividend payout ratio provides insight into the proportion of earnings distributed as dividends. A lower ratio indicates that the company retains a significant portion of its earnings, ensuring funds for future growth and unexpected downturns. As of 2023-06-30, Air Products & Chemicals Inc's dividend payout ratio stands at 0.69.
Air Products & Chemicals Inc's profitability rank of 8 out of 10, as of 2023-06-30, indicates good profitability prospects. The company has reported positive net income each year over the past decade, further reinforcing its high profitability.
Looking at Growth Metrics
For dividends to be sustainable, the company must demonstrate robust growth metrics. Air Products & Chemicals Inc's growth rank of 8 out of 10 suggests a good growth trajectory relative to its competitors.
Revenue is a crucial indicator of a company's health, and Air Products & Chemicals Inc's revenue per share, combined with the 3-year revenue growth rate, shows a strong revenue model. The company's revenue has increased by approximately 12.30% per year on average, outperforming approximately 58.73% of global competitors.
The company's 3-year EPS growth rate showcases its ability to grow its earnings, a critical factor for sustaining dividends in the long run. Over the past three years, Air Products & Chemicals Inc's earnings have increased by approximately 8.30% per year on average, outperforming approximately 43.48% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.40% outperforms approximately 57.23% of global competitors.
Conclusion
Based on the analysis of Air Products & Chemicals Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, it is evident that the company has a strong dividend performance. Its consistent dividend payments, coupled with a healthy payout ratio and robust growth metrics, indicate a sustainable dividend in the future. However, as with all investments, it is crucial for investors to conduct their own due diligence.
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