2022 Week 20: Air Products and Chemicals (NYSE: APD)

Portfolio Update

The FiveTwenty portfolio received no dividends in the past week.

Past Week Dividend$0
Current Quarter Dividend (Q2 2022)$363.60
LifeTime Dividend$3,648.27
Estimated Annual Dividend$5,153.35
Dividend Scorecard

The capital allocation for the week of 05/15/2021 to 05/21/2021 will be used to add to our position in Air Products and Chemicals (NYSE: APD)

APD – Position Update

Since our last check-in on APD in week 17 of 2022, the company reported Q2 2022 earnings on 05/05/2022. In addition, the share price decreased 3.8% from $242.92 to $233.71 during that time.

TTMPrev. Update10-year median
Dividend Streak40 years40 years
Yield (TTM)2.62%2.52%2.47%
Payout Ratio62.96%164.97%2
P/E24.04125.792
Entry Criteria Scorecard

1 computed using TTM adjusted EPS of $9.72 as of Q2 2022
2 computed using TTM adjusted EPS of $9.42 as of Q1 2022

Q2 2022 earnings report

Did APD’s latest earnings report raise any warning flags?

APD had an relatively un-eventful earnings release for Q2 2022. Even though higher energy cost impacted margins negatively, the company grew revenue, net income and EPS and remains on track to meet the full year forecast for FY 2022 adjusted EPS. Overall, revenues grew 17.7%, adjusted net earnings increased 14.53%, and adjusted EPS were 14.42% higher.

Revenue
(in millions)
Adj. Net Income
(in millions)
Adj. EPS
.
Q2 2021$2,502$463.2$2.08
Q2 2022$2,945$530.5$2.38
% Change17.7%14.53%14.42%

Additional noteworthy developments during the quarter:

  • On 4/22/2022 APD announced a $2 billion expansion project at World Energy’s production and distribution hub in Paramount, California.
  • APD also announced a $1.3 billion of on-site awards to serve the semiconductor industry.

Looking ahead, APD re-iterated FY 2022 adjusted EPS guidance of $10.20 to $10.40, an increase of 13% to 15%. The company also re-affirmed the $4.5 to $5.0 billion goal for capital expenditure for the year.

Thesis

Why are we adding to our position in APD?

The most recent earning report for APD confirmed our original thesis, therefor we are increasing our position in the company at a similar valuation to our initial investment.

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