Shares of Air Products & Chemicals Inc. (APD) touched a new 52-week high of $148.74 on Dec 19, 2014, before eventually closing the day lower at $147.04. The company surpassed its previous high of $147.53 on Dec 5.
The industrial gas giant, with a market cap of roughly $31.4 billion, has seen its shares rise around 35.9% over the past year. Its year-to-date return is roughly 34%, much higher than the S&P 500’s total return of 14.3%. Average volume of shares traded over the last three months is roughly 1,686K. The company’s long-term projected EPS growth is around 11.8%.
What’s Driving Air Products Up?
Share price of Air Products has been on the rise since it posted its fourth-quarter 2014 results on Oct 30. Its adjusted earnings for fourth-quarter fiscal 2014 beat the Zacks Consensus Estimate while sales missed.
Sales rose in the quarter as a decline in the Tonnage Gases division was more than offset by gains in other businesses. Revenues in the core Merchant Gases segment were driven by higher volumes in key regions and positive pricing in U.S./Canada, Europe and Latin America.
Air Products is also gaining from incremental opportunities in the liquefied natural gas (“LNG”) market. The company has been chosen for a major off-shore LNG project in Malaysia, representing a significant opportunity for its LNG offerings. Moreover, the company recently agreed to supply its LNG technology and equipment to Technip for a mid-scale LNG project in Inner Mongolia Province, China. The LNG technology is gaining importance as it meets the increasing global need for cleaner energy.
Air Products has recently launched a new microsite to promote the safety of employees and equipment in various industries. The company has well demonstrated the various applications of nitrogen like inerting, blanketing and purging, which are widely used in industries while handling flammable or toxic materials.
It has combined its technical knowledge and applications experience to provide the most cost-effective and efficient safety solutions, matching the consumer’s volume, pressure, purity level, flow rate and operating pattern.
Air Products is also working with Hyundai Motor Company Australia (“HMCA”) for fueling the latter’s first hydrogen-powered car. Hyundai’s hydrogen-powered zero-emission fuel cell electric vehicle (“FCEV”), Hyundai ix35, will be imported to Australia for demonstrating the advantages of hydrogen-powered fuel cell electric vehicle technology in the country. Air Products is working with Hyundai and other vehicle manufacturers to expand its footprint in the hydrogen fueling market around the world.
Air Products, a Zacks Rank #3 (Hold) stock, is benefiting from a diverse customer base, cost-reduction measures and sustained pricing power. New business deals and strategic investments are expected to support results in fiscal 2015.
Better-ranked companies in the chemical diversified industry worth considering include Innospec Inc. (IOSP), Valhi, Inc. (VHI) and Celanese Corporation (CE). While Innospec and Valhi sport a Zacks Rank #1 (Strong Buy), Celanese carries a Zacks Rank #2 (Buy).
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