As of today (2026-06-26), Air Products and Chemicals's weighted average cost of capital is 1.25%%. Air Products and Chemicals's ROIC % is 6.63% (calculated using TTM income statement data).
Air Products and Chemicals generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
For a comprehensive WACC calculation, please access the WACC Calculator.
Air Products and Chemicals (MEX:APD) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Air Products and Chemicals's weighted average cost of capital is 1.25%%. Air Products and Chemicals's ROIC % is 6.63% (calculated using TTM income statement data).
Air Products and Chemicals generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Specialty Chemicals subindustry, Air Products and Chemicals's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Air Products and Chemicals WACC % vs Chemicals Industry
For the Chemicals industry and Basic Materials sector, Air Products and Chemicals's WACC % distribution charts can be found below:
* The bar in red indicates where Air Products and Chemicals's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Air Products and Chemicals's market capitalization (E) is MXN1098922.494 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Air Products and Chemicals's latest one-year quarterly average Book Value of Debt (D) is MXN335620.3624 Mil.
a) weight of equity = E / (E + D) = 1098922.494 / (1098922.494 + 335620.3624) = 0.766
b) weight of debt = D / (E + D) = 335620.3624 / (1098922.494 + 335620.3624) = 0.234
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.374%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Air Products and Chemicals's beta is -0.5074.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.374% + -0.5074 * 6% = 1.3296%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Air Products and Chemicals's interest expense (positive number) was MXN4273.78 Mil. Its total Book Value of Debt (D) is MXN335620.3624 Mil.
Cost of Debt = 4273.78 / 335620.3624 = 1.2734%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 10776.913 / 50249.342 = 21.45%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Air Products and Chemicals (MEX:APD) has a WACC % of 1.25% as of Jun. 26, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Air Products and Chemicals and its competitors. This is 84% below median its historical median of 7.74. Over the past decade, Air Products and Chemicals' WACC % has ranged from 5.24 to 8.89. According to the industry distribution chart, Air Products and Chemicals ranks #440 out of 1637 companies in the Chemicals industry, placing it in the top 26.9%.
Is Air Products and Chemicals' WACC % too high?
Air Products and Chemicals' current WACC % of 1.25% is 84% below median its 10-year median of 7.74. Over the past 10 years, this metric has ranged from a low of 5.24 to a high of 8.89. The Chemicals industry median WACC % is 9.20. Air Products and Chemicals' value of 1.25% is 86.4% below this industry median. Based on the distribution chart, Air Products and Chemicals ranks #440 out of 1637 companies in the Chemicals industry, which is above the industry midpoint. Overall, Air Products and Chemicals has a GF Score™ of 79/100, reflecting its overall financial health beyond just this single metric.
How does Air Products and Chemicals' WACC % compare to ECL and SHW?
According to the Chemicals industry distribution chart, Air Products and Chemicals ranks #440 out of 1637 companies for WACC %. This puts Air Products and Chemicals in the upper half of its industry. The industry median WACC % is 9.20. Air Products and Chemicals' value of 1.25% is 86.4% below this benchmark. Historically, Air Products and Chemicals' own WACC % has ranged from 5.24 to 8.89 over the past decade. While the company's 10-year median is 7.74 vs. the industry median of 9.20, Air Products and Chemicals has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Chemicals company?
The median WACC % among Chemicals companies is 9.20, based on 1,637 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Air Products and Chemicals's current WACC % of 1.25% is 86.4% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Air Products and Chemicals and its competitors. For the Chemicals industry, the median WACC % is 9.20 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Air Products and Chemicals's current WACC % is 1.25%, which is 84% below median its own 10-year median of 7.74. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Air Products and Chemicals stock overvalued right now?
Air Products and Chemicals (MEX:APD) has a current WACC % of 1.25%. The stock's GF Value™ is MXN5,257.48, compared to a current price of MXN5,185.97 — trading 1.4% below its estimated fair value. The current WACC % is 1.25%, which is 84% below median its 10-year median of 7.74 and 86.4% below the Chemicals industry median of 9.20. Air Products and Chemicals' overall GF Score™ is 79/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Air Products and Chemicals (MEX:APD), the current WACC % is 1.25% as of Jun. 26, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Air Products and Chemicals (MEX:APD) Overvalued in 2026?
Based on GuruFocus' analysis, Air Products and Chemicals stock appears to be undervalued.
The current stock price of MXN5,185.97 is trading 1.4% below its estimated GF Value™ of MXN5,257.48.
Key valuation signals for MEX:APD:
WACC %: 1.25% (84% below median its 10-year median of 7.74)
GF Value™: MXN5,257.48 vs. price of MXN5,185.97 (1.4% below fair value)
Industry Position: 86.4% below the Chemicals median (#440 of 1637)
No single metric tells the full story. See the MEX:APD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Since its founding in 1940, Air Products has become one of the leading industrial gas suppliers globally, with operations in 50 countries and 19,000 employees. The company is the world's largest supplier of hydrogen and helium. It has a unique portfolio serving customers across industries, including chemicals, energy, healthcare, metals, and electronics. Air Products generated roughly $12 billion in revenue in fiscal 2025.
79GF Score
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