APD’s Dividend Yield Fell despite the Higher Dividend

Dividend yield

As of March 28, Air Products and Chemicals’ (APD) dividend yield was 2.45%, which is 30 basis points less than the fourth-quarter dividend yield of 2.75%. LyondellBasell (LYB), Eastman Chemical (EMN), and Celanese (CE) have dividend yields of 4.8%, 3.3%, and 2.23%, respectively.

APD’s Dividend Yield Fell despite the Higher Dividend

Air Products and Chemicals’ dividend yield is lower than its peers with the exception of Celanese. Air Products and Chemicals’ dividend yield is more or less on par with the yield generated from one-year Treasury bonds. However, Air Products and Chemicals could still be seen as an alternative investment option for long-term investors who look for consistent dividend yields and good dividend growth.

Why did the dividend yield decline?

As we mentioned above, Air Products and Chemicals’ dividend yield has fallen. The dividend yield has fallen below 2.5% sequentially for the first time in four quarters. The main reason for the decline in Air Products and Chemicals’ dividend yield, despite an increase in the dividend rate by 5.5%, is an increase in the stock price. Since the beginning of 2019, Air Products and Chemicals’ stock price has risen ~18.4%. If the stock price continues to increase, then Air Products and Chemicals’ dividend yield could continue to decline. The company would need to increase its dividend rate significantly.

Investors could hold Air Products and Chemicals indirectly by investing in the iShares U.S. Basic Materials ETF (IYM). IYM has invested 7.0% of its portfolio in Air Products and Chemicals as of March 28.