6. Air Products and Chemicals, Inc. (NYSE:APD)
Number of Hedge Fund Holders: 60
An American international company, Air Products and Chemicals, Inc. (NYSE:APD) is focused on performance materials, industrial gases, and associated equipment and services.
The company is a major player in the infrastructure for hydrogen fuel and one of the biggest suppliers of merchant hydrogen worldwide. Air Products and Chemicals, Inc. (NYSE:APD) can create 7 million kg of fuel per day with more than 100 hydrogen plants. By concentrating on gasification, carbon capture, and clean hydrogen, the company intends to be at the forefront of tackling global energy and environmental concerns. The firm is now engaged in a number of large-scale hydrogen projects that should be finished in the upcoming years. Developing the largest blue hydrogen facility in the world is one of its main initiatives, which will cost $4.5 billion in Louisiana. The facility is expected to capture and store more than 5 million metric tons of carbon dioxide per year once it is operational. The stock grew by nearly 10% in the past year, making it one of the best materials stocks.
Aristotle Value Equity Strategy stated the following regarding Air Products and Chemicals, Inc. (NYSE:APD) in its Q1 2025 investor letter:
“Founded in 1940 and with headquarters in Pennsylvania, Air Products and Chemicals, Inc. (NYSE:APD) and Chemicals is a leading global supplier of industrial gases, including oxygen, nitrogen, helium, hydrogen and others. These essential gases serve critical roles across a wide range of industries, such as refining, chemicals, metals, electronics, manufacturing, healthcare, and food manufacturing and packaging. Air Products is the leading global supplier of hydrogen, with a robust distribution network across North America.
Roughly 50% of the company’s revenue is generated through onsite delivery. This method usually entails 15- to 20-year contracts where Air Products builds a facility at the customer’s site or nearby (or delivers the gases through pipeline systems).
These long-term contracts tend to include pass-through and take-or-pay provisions, which provide stability and predictability of cash flows. The company’s merchant gases (roughly 35% of revenue) are delivered in bulk by tanker in either liquid or gas form, usually under five-year contracts, providing a steady but more variable revenue stream. Smaller quantities can also be delivered to customers, usually packaged in cylinders. (This business represents less than 15% of revenue.) …” (Click here to read the full text)
The company’s revenue in fiscal Q1 2025 was $2.9 billion, which was 2% less than the year before. The main causes of this decline were a 1% negative currency impact and a 2% decline in sales volume, which were somewhat countered by a 1% price rise. The sale of Air Products and Chemicals, Inc. (NYSE:APD)’s LNG business in September 2024 and decreased contributions from merchant and on-site activities in Europe were the main causes of the volume fall. However, a one-time, sizable helium sale to an existing merchant customer in the Americas helped to offset these difficulties to some extent. The impact on revenues from the LNG divestiture alone was about 2%.
