Air Products & Chemicals, Inc. (APD) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA above its 5-year median

Air Products & Chemicals's EV/EBITDA of 76.6 is above its 5-year median of 17.4.

P/B above the industry

Air Products & Chemicals's price-to-book of 5.06 is above the Chemicals and Allied Products median of 1.25.

Trading above fair value

The share price of $315.18 is above our fair value estimate of $102.40.

Margin of safety under 20%

The price is 208% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -1.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 4.5% over the last twelve months; the Chemicals and Allied Products median is 8.2%.

Guidance raised

Air Products & Chemicals raised its fiscal 2026 full-year adjusted EPS guidance * outlook on Jul 30, 2026.

Gross margin improving

Gross margin was 32.1% over the last twelve months, against 31.9% a year earlier.

Return on equity under 15%

Return on equity was -0.3% over the last twelve months and averaged 14.4% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was -3.3%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Air Products & Chemicals's return on equity of -0.3% is above the Chemicals and Allied Products median of -0.8%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was -0.4% over the last twelve months, against a 5-year average of 16.9%.

Net margin below the industry

Air Products & Chemicals's net margin of -0.4% is below the Chemicals and Allied Products median of -0.4%.

Low debt

Debt is 6.5% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 63.0% five years ago to 6.5%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 510% of total debt.

Interest not well covered

Operating income covers interest expense -2.7 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.08 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.60; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Air Products & Chemicals paid dividends worth 2.3% of the share price over the last twelve months.

Yield below Treasuries

The 2.3% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Air Products & Chemicals yields 2.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.