Boring. Steady. Performing. This HIGH Dividend growth rate stock is DOWN 25% so far in 2022. This dividend growth stock has also increased their dividend for over 40 years. Time to take a look at Air Products & Chemicals, to see if this is a stock to buy now!
Air Products & Chemicals (APD) Stock
Everyone, brace yourselves. Air Products & Chemicals stock has dropped almost $100 in stock price! The 52 week high sits at $316. APD, as you can see above, has a stock price of $221.50. $5 away from a $100 stock price drop on this amazingly boring, yet wonderful – dividend growth stock.
Having increased their dividend for 40+ years, they are a staple in the dividend investing community. Those on the journey to financial freedom, whom want to buy boring dividend stocks, buy APD stock.
Since 1982, APD stock is up an astonishing 5,900% or 140% on average, per year, over a 40 year period. Not too bad, right?
A nice run up over the last 40 years in deed. The company has been around for almost 85 years and they are based next door to Ohio, in Allentown, PA. APD literally sells Gas and Chemicals. There you have it.
However, though it’s boring, they crush it out there. We’ll get into the stock metrics here shortly, but the appreciation above is no joke. You know what else is no joke as a dividend stock investor? The dividend history. Check out this chart:
Paying now $1.62 per share, per quarter, they have come a long way. You can tell, not a single blip in the radar. I know, you are ready to see what the dividend stock metrics look like for this dividend stock to buy now! Let’s GO!
APD dividend stock analysis
As you know it’s time to review Coca-Cola with the Dividend Diplomat Stock Screener! Here, we focus on 3 main dividend stock metrics:
1.) Price to Earnings Ratio (P/E): We look for the price to earnings ratio < the S&P 500 and the competition.
2.) Dividend Payout Ratio: The preferred dividend payout ratio is < 60%. In fact, we believe the perfect payout ratio is between 40% and 60%.
3.) Dividend Growth Rate: Given we are dividend investing on our way to financial freedom, as we believe dividend income is the best source of passive income, we look at the 5 year dividend growth rate. In addition, we review how many years the company has increased their dividend.
1.) P/E Ratio: APD has a price to earnings ratio, as of March 7th of 18.94. This is under the S&P 500 p/e ratio of 25x earnings. Decent value here. Not significantly undervalued by any means, but APD rarely trades at these levels.
2.) Dividend Payout Ratio: A perfect dividend payout ratio at 55%. They are right in that sweet spot of 40-60%, APD stock is perfect here.
3.) Dividend Growth Rate: First, they’ve increased their dividend from $1.50 to $1.62 or 8%. Their 5 year average is a blistering 11.83%. APD stock has grown their dividend for 40 years, too, not too shabby.
Lastly, we’ll take a look at the dividend yield. As an investor, you want to know how much owning this dividend stock pays you now! The yield for APD is 2.92%, wow. Almost at 3%, which is significantly higher than the 5 year dividend yield average of 2.30%. This is also 2x the S&P 500 dividend yield.
is APD a dividend stock to buy?
Now that we’ve gone through the metrics, is APD a stock to buy for the dividend stock portfolio?
If you have no exposure to the chemicals/gas part of the stock market, I couldn’t think or recommend a more perfect stock to buy.
I currently own LyondellBasell (LYB) and DOW Chemical (DOW), already. Therefore, I have a significant foot in the industry within my dividend stock portfolio. If I had less exposure and/or one less stock, I would be all over Air Products & Chemicals (APD)!
If you head over to our YouTube channel, you’ll find other undervalued dividend growth stocks that are higher on my list for stocks to buy now!
How about you? Do you own APD stock? Do you think APD is a stock to buy now in this significantly volatile stock market? Share your comments and feedback below!
As always, thanks for stopping by, good luck and happy investing!
-Lanny
$APD should be on the radar for many dividend investors. It has finally come into a good value range again. With an expected recession in the next 12-18 months its price might drop even further but it’s at a point to start adding to it.
DGJ –
Right – never a bad time to add when it is down, vs. rolling the dice trying to grab it lower.
-Lanny
APD has been one of my first dividend stocks in my DGI portfolio. I own a good amount and wouldn’t mind adding more. A safe yield and trading near 3% should have a space in any dividend portfolio. Like you I also hold LYB but feel comfortable adding more to APD. Thanks for analysis.
DH –
Heck yah, you must have acquired them at such a low price. Glad they are coming back down to earth for dividend investors.
-Lanny
Very timely post. I just added a share of APD earlier this month and plan on adding a couple more this week.
Kody –
NICE! All about timing. Let’s get after it!
-Lanny
My dad bought the stock for my kids and now I buy APD shares for each grandchild’s birthday matching the number of shares to their age…setting them up for the long haul.