Welcome to the Dividend Farm, APD

March toward $1,000,000: Weeks 19-26 (Dec. 3, 2018-Jan. 18, 2019)

I got away from my bread and butter – weekly updates – which I blame the holiday season for … entirely. I have to blame something, right? I can’t possibly blame myself. It’s not my fault … life just gets in the way sometimes.

Right? Yeah, yeah, right, of course.

Sorry, I had to take a few sentences to make myself feel better about, well, the blatant disrespect I showed my Dividend Farm over the course of the last – holy crap (gulp) – almost two months! It’s not like I totally ignored it. I did buy a share of Constellation Brands and earn dividends from a handful of companies so far in 2019, but I didn’t give it anywhere close to the attention it deserves. I mean, this is my future – my family’s future – I’m building here.

That said, I took another step in my march this week.

This Week’s Purchase: Air Products and Chemicals

I posted a shot of my sector allocation to Instagram and Facebook last week. The key takeaway was this: I didn’t have any exposure to materials. Not a single stock. I knew that needed to change and, well, I did just that by scooping up a share of Air Products and Chemicals (APD) for $159.05.

I took a look at a few others, Eastman Chemical to name one, but I went with APD because it’s one helluva dividend-growth stock. As of this post, the company has a $4.40 annualized dividend, which represents a 2.82% yield and 65% payout ratio. Those numbers are all pretty decent, but nothing compared to the track record. APD has been raising its dividend annually for better than three decades, 36 years to be exact, and is still going strong. The raises are still pretty good, too. Most recently, for example, it’s boosted its dividend at an average rate of 9.21% over the course of the last five years.

Not too shabby, right?

As far as valuation is concerned, it doesn’t appear to be overly cheap or expensive. The 52-week range is $148.44-$175.17, so it’s obviously closer to the lower end of that than the higher end. It has a P/E ratio of 23.01 (kinda high, but I can live with it), the Price/Book ratio is 3.25, the Debt/Capital ratio is 24.68% (which is good) and the profit margin is 19.70% (also pretty good).

The Bottom Line

The purchase boosted my forward annual income by $4.40, from $203.56 to $207.96.

March on!

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