We assign a fundamental rating of 3 out of 10 to APD. APD was compared to 83 industry peers in the Chemicals industry. There are concerns on the financial health of APD while its profitability can be described as average. APD has a expensive valuation and it also scores bad on growth.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

APD had positive earnings in the past year.
In the past year APD had a positive cash flow from operations.
APD had positive earnings in 4 of the past 5 years.
In the past 5 years APD always reported a positive cash flow from operatings.

1.2 Ratios

APD has a Return On Assets (-0.96%) which is comparable to the rest of the industry.
The Return On Equity of APD (-2.63%) is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 6.23%, APD is in the better half of the industry, outperforming 69.88% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for APD is in line with the industry average of 6.11%.

		Industry Rank	Sector Rank
ROA	-0.96%
ROE	-2.63%
ROIC	6.23%

ROA(3y)5.3%

ROA(5y)6.4%

ROE(3y)11.97%

ROE(5y)13.72%

ROIC(3y)6.89%

ROIC(5y)7.28%

1.3 Margins

With an excellent Operating Margin value of 23.74%, APD belongs to the best of the industry, outperforming 91.57% of the companies in the same industry.
APD's Operating Margin has been stable in the last couple of years.
The Gross Margin of APD (31.41%) is comparable to the rest of the industry.
APD's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	23.74%
PM (TTM)	N/A
GM	31.41%

OM growth 3Y7.7%

OM growth 5Y-0.94%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y5.89%

GM growth 5Y-1.48%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), APD is destroying value.
The number of shares outstanding for APD remains at a similar level compared to 1 year ago.
Compared to 5 years ago, APD has more shares outstanding
APD has a worse debt/assets ratio than last year.

2.2 Solvency

APD has an Altman-Z score of 2.57. This is not the best score and indicates that APD is in the grey zone with still only limited risk for bankruptcy at the moment.
APD has a better Altman-Z score (2.57) than 74.70% of its industry peers.
A Debt/Equity ratio of 1.13 is on the high side and indicates that APD has dependencies on debt financing.
APD has a Debt to Equity ratio of 1.13. This is in the lower half of the industry: APD underperforms 69.88% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.13
Debt/FCF	N/A
Altman-Z	2.57

ROIC/WACC0.49

WACC12.76%

2.3 Liquidity

A Current Ratio of 1.38 indicates that APD should not have too much problems paying its short term obligations.
The Current ratio of APD (1.38) is worse than 78.31% of its industry peers.
APD has a Quick Ratio of 1.20. This is a normal value and indicates that APD is financially healthy and should not expect problems in meeting its short term obligations.
APD has a Quick ratio (1.20) which is in line with its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.38
Quick Ratio	1.2

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

APD shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.12%.
The Earnings Per Share has been growing slightly by 7.07% on average over the past years.
APD shows a decrease in Revenue. In the last year, the revenue decreased by -0.52%.
APD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.33% yearly.

EPS 1Y (TTM)-1.12%

EPS 3Y4.94%

EPS 5Y7.07%

EPS Q2Q%10.49%

Revenue 1Y (TTM)-0.52%

Revenue growth 3Y-1.77%

Revenue growth 5Y6.33%

Sales Q2Q%5.83%

3.2 Future

The Earnings Per Share is expected to grow by 7.88% on average over the next years.
APD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.78% yearly.

EPS Next Y8.71%

EPS Next 2Y7.93%

EPS Next 3Y8.42%

EPS Next 5Y7.88%

Revenue Next Year3.82%

Revenue Next 2Y4.81%

Revenue Next 3Y5.53%

Revenue Next 5Y6.78%

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 22.10, APD is valued on the expensive side.
APD's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 28.32. APD is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 19.45, which indicates a rather expensive current valuation of APD.
APD's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, APD is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	22.1
Fwd PE	19.45

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of APD indicates a slightly more expensive valuation: APD is more expensive than 71.08% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	17.29

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates APD does not grow enough to justify the current Price/Earnings ratio.

PEG (NY)2.54

PEG (5Y)3.13

EPS Next 2Y7.93%

EPS Next 3Y8.42%

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5. Dividend

5.1 Amount

APD has a Yearly Dividend Yield of 2.83%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.27, APD pays a bit more dividend than its industry peers.
APD's Dividend Yield is rather good when compared to the S&P500 average which is at 1.83.

		Industry Rank	Sector Rank
Dividend Yield	2.83%

5.2 History

On average, the dividend of APD grows each year by 7.30%, which is quite nice.
APD has been paying a dividend for at least 10 years, so it has a reliable track record.
APD has decreased its dividend recently.

Dividend Growth(5Y)7.3%

Div Incr Years1

Div Non Decr Years1

5.3 Sustainability

The earnings of APD are negative and hence is the payout ratio. APD will probably not be able to sustain this dividend level.
APD's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.

DP-401.55%

EPS Next 2Y7.93%

EPS Next 3Y8.42%

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AIR PRODUCTS & CHEMICALS INC / APD FAQ

What is the fundamental rating for APD stock?

ChartMill assigns a fundamental rating of 3 / 10 to APD.

What is the valuation status for APD stock?

ChartMill assigns a valuation rating of 1 / 10 to AIR PRODUCTS & CHEMICALS INC (APD). This can be considered as Overvalued.

Can you provide the profitability details for AIR PRODUCTS & CHEMICALS INC?

AIR PRODUCTS & CHEMICALS INC (APD) has a profitability rating of 5 / 10.

What is the valuation of AIR PRODUCTS & CHEMICALS INC based on its PE and PB ratios?

The Price/Earnings (PE) ratio for AIR PRODUCTS & CHEMICALS INC (APD) is 22.1 and the Price/Book (PB) ratio is 4.04.

Can you provide the financial health for APD stock?

The financial health rating of AIR PRODUCTS & CHEMICALS INC (APD) is 2 / 10.