← All companies ← APAM Manual APEI → Industrial Gases KRO →

APD, Air Products and Chemicals Inc.

Industrial Gases capital-intensive Capital build-out

Products Air Products and Chemicals, Inc. is a world-leading industrial gases company that has built a reputation for its innovation, operational excellence, and commitment to safety and environmental stewardship.

Additional information about Air Products is available on our website at www.airproducts.com.

Focused on serving energy, environmental, and emerging markets and generating a cleaner future, we offer products and services that improve our customers' operations and sustainability.

Latest annual: FY2025 10-K

APD · Air Products and Chemicals Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$12.0B

−0.5% YoY · 6% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $12.5B 5-yr avg $12.0B

Gross margin 32% 5-yr avg 30%

Operating margin 18.4% 5-yr avg 18.0%

ROIC 6% 5-yr avg 8%

Owner-earnings margin 21% 5-yr avg 16%

Free cash flow margin −10% 5-yr avg −12%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Capital build-out. Capital spending has surged to 58% of sales, today's earnings are charged less depreciation than tomorrow's will be.
What moves the needle: Gross margin has run about 31% and operating margin about 20% through the cycle, a solid spread between what it charges and what the product costs to make. The operating margin has swung widely — from −7.3% to 37% over the years — so the through-cycle figure carries more than any single year, and the worst year more than the best. Capital spending runs about 23% of sales, well above depreciation, so the return earned on what it sinks into that plant weighs as much as the margin. Read this kind of business on the spread and utilization. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has sat near the cost of capital (median 12%). By owner earnings: roughly 18% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

61% of revenue comes from outside the United States.

Revenue by geography, FY2025

Other foreign operations45%$5.4B
United States39%$4.7B
China16%$1.9B

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$7.5B	$8.2B	$8.9B	$8.9B	$8.9B	$10.3B	$12.7B	$12.6B	$12.1B	$12.0B	$12.5B	RevenueRevenue
31%	30%	31%	33%	34%	30%	26%	30%	—	31%	32%	Gross marginGross mgn
9%	9%	9%	8%	9%	8%	7%	8%	8%	8%	7%	SG&A / revenueSG&A/rev
1%	1%	1%	1%	1%	1%	1%	1%	1%	1%	1%	R&D / revenueR&D/rev
$1.5B	$1.4B	$2.0B	$2.1B	$2.2B	$2.3B	$2.3B	$2.5B	$4.5B	($877M)	$2.3B	Operating incomeOp. inc.
20.5%	17.6%	22.0%	24.0%	25.3%	22.1%	18.4%	19.8%	36.9%	−7.3%	18.4%	Operating marginOp. mgn
$631M	$3.0B	$1.5B	$1.8B	$1.9B	$2.1B	$2.3B	$2.3B	$3.8B	($395M)	$2.1B	Net incomeNet inc.
41%	8%	26%	21%	20%	18%	18%	19%	20%	—	22%	Effective tax rateTax rate
											Cash flow & returns
$2.3B	$2.5B	$2.5B	$3.0B	$3.3B	$3.3B	$3.2B	$3.2B	$3.6B	$3.3B	$4.1B	Operating cash flowOp. cash
$855M	$866M	$971M	$1.1B	$1.2B	$1.3B	$1.3B	$1.4B	$1.5B	$1.6B	$1.6B	DepreciationDeprec.
$742M	($1.4B)	$40M	$86M	$140M	($130M)	($472M)	($513M)	($1.7B)	$2.0B	$406M	Working capital & otherWC & other
$908M	$1.0B	$1.6B	$2.0B	$2.5B	$2.5B	$2.9B	$4.6B	$6.8B	$7.0B	$5.4B	CapexCapex
12.1%	12.7%	17.6%	22.3%	28.3%	23.9%	23.0%	36.7%	56.2%	58.3%	43.1%	Capex / revenueCapex/rev
$1.4B	$1.5B	$1.6B	$1.9B	$2.1B	$2.0B	$1.8B	$1.8B	$2.2B	$1.7B	$2.6B	Owner earningsOwner earn.
18.0%	18.2%	17.7%	21.2%	23.5%	19.5%	14.4%	14.7%	18.1%	14.1%	20.6%	Owner earnings marginOE mgn
$1.4B	$1.5B	$979M	$980M	$756M	$871M	$244M	($1.4B)	($3.1B)	($3.8B)	($1.3B)	Free cash flowFCF
18.0%	18.2%	11.0%	11.0%	8.5%	8.4%	1.9%	−11.3%	−26.0%	−31.3%	−10.0%	Free cash flow marginFCF mgn
$0	$8M	$345M	$123M	$183M	$11M	$65M	$0	$0	$60M	$60M	AcquisitionsAcquis.
$721M	$788M	$898M	$994M	$1.1B	$1.3B	$1.4B	$1.5B	$1.6B	$1.6B	$1.6B	Dividends paidDiv. paid
8%	12%	12%	14%	12%	11%	11%	9%	13%	-2%	6%	ROICROIC
9%	30%	14%	16%	16%	16%	17%	16%	22%	-3%	13%	Return on equityROE
−1%	22%	6%	7%	6%	6%	7%	6%	13%	−13%	3%	Retained to equityRetained/eq
											Balance sheet
$1.3B	$3.7B	$3.0B	$2.4B	$6.4B	$5.8B	$3.3B	$1.9B	$3.0B	$1.9B	$951M	Cash & investmentsCash+inv
$1.1B	$1.2B	$1.2B	$1.3B	$1.3B	$1.5B	$1.8B	$1.7B	$1.8B	$1.9B	$1.9B	ReceivablesReceiv.
$255M	$335M	$396M	$388M	$405M	$454M	$514M	$652M	$766M	$777M	$768M	InventoryInvent.
$579M	$660M	$595M	$528M	$546M	$737M	$1.1B	$1.2B	$1.5B	$1.4B	$2.9B	Accounts payablePayables
$822M	$850M	$1.0B	$1.1B	$1.1B	$1.2B	$1.2B	$1.1B	$1.1B	$1.2B	($151M)	Operating working capitalOper. WC
$4.3B	$5.9B	$5.1B	$4.6B	$8.7B	$8.4B	$6.3B	$5.2B	$6.4B	$5.8B	$5.0B	Current assetsCur. assets
$3.3B	$2.5B	$2.3B	$1.8B	$2.4B	$2.8B	$3.5B	$3.9B	$4.2B	$4.2B	$3.5B	Current liabilitiesCur. liab.
1.3×	2.4×	2.2×	2.5×	3.6×	3.0×	1.8×	1.3×	1.5×	1.4×	1.4×	Current ratioCurr. ratio
$845M	$722M	$789M	$797M	$892M	$912M	$823M	$862M	$905M	$964M	$959M	GoodwillGoodwill
$18.0B	$18.5B	$19.2B	$18.9B	$25.2B	$26.9B	$27.2B	$32.0B	$39.6B	$41.1B	$41.6B	Total assetsAssets
$5.3B	$4.0B	$3.8B	$3.3B	$7.9B	$7.6B	$7.6B	$10.3B	$14.2B	$17.7B	$17.7B	Total debtDebt
$4.0B	$285M	$837M	$911M	$1.5B	$1.8B	$4.3B	$8.4B	$11.2B	$15.8B	$16.7B	Net debt / (cash)Net debt
13.3×	11.9×	15.1×	15.7×	20.5×	16.1×	18.3×	14.1×	20.4×	-4.1×	9.8×	Interest coverageInt. cov.
$7.1B	$10.1B	$10.9B	$11.1B	$12.1B	$13.5B	$13.1B	$14.3B	$17.0B	$15.0B	$15.6B	Shareholders’ equityEquity
0.4%	0.5%	0.4%	0.5%	0.6%	0.4%	0.4%	0.5%	0.5%	0.6%	0.4%	Stock comp / revenueSBC/rev
											Per share
218M	220M	221M	222M	222M	223M	223M	223M	223M	223M	223M	Shares out (diluted)Shares
$34.37	$37.25	$40.44	$40.25	$39.84	$46.40	$57.07	$56.58	$54.31	$54.05	$55.92	Revenue / shareRev/sh
$2.89	$13.65	$6.78	$7.94	$8.49	$9.43	$10.14	$10.33	$17.18	$-1.77	$9.45	EPS (diluted)EPS
$6.19	$6.77	$7.14	$8.52	$9.36	$9.05	$8.24	$8.30	$9.85	$7.60	$11.49	Owner earnings / shareOE/sh
$6.19	$6.77	$4.43	$4.42	$3.40	$3.91	$1.10	$-6.38	$-14.14	$-16.91	$-5.61	Free cash flow / shareFCF/sh
$3.30	$3.58	$4.07	$4.49	$4.96	$5.65	$6.22	$6.72	$7.02	$7.11	$7.15	Dividends / shareDiv/sh
$4.16	$4.73	$7.10	$8.98	$11.29	$11.08	$13.15	$20.77	$30.51	$31.53	$24.10	Cap. spending / shareCapex/sh
$32.43	$45.89	$49.17	$49.88	$54.34	$60.85	$59.07	$64.27	$76.47	$67.47	$70.21	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+5.2%/yr	+6.3%/yr
Owner earnings / share	+2.3%/yr	−4.1%/yr
Dividends / share	+8.9%/yr	+7.5%/yr
Capital spending / share	+25.2%/yr	+22.8%/yr
Book value / share	+8.5%/yr	+4.4%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Revenue-0.5%
“Sales The table below summarizes the major factors that impacted consolidated sales for the periods presented: Volume (4 %) Price 1 % Energy cost pass-through to customers 2 % Currency — % Total Consolidated Sales Change (1 %) Sales of $12.0 billion decreased 1%, or $63.3, as lower volumes of 4% were partially offset by higher energy cost pass-through to customers of 2% and favorable pricing of 1%.”
✓ figure matches the filed record

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

223Mpeak FY2024

ROIC

−2%low FY2025

Gross margin

31%low FY2022

Net debt ÷ owner earnings

9.4×peak FY2025

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$1.7Bowner earningsvs.($395M)net incomelow FY2016

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $1.7B of owner earnings, the operating cash left after the $1.6B it takes just to hold its position. It put $5.5B more into growth; free cash flow, after that spending, was ($3.8B).

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	($395M)	$3.8B	$2.3B	$2.3B	$2.1B
Depreciation & amortizationnon-cash charge added back	+$1.6B	+$1.5B	+$1.4B	+$1.3B	+$1.3B
Stock-based compensationreal costnon-cash, but a real cost	+$76M	+$62M	+$60M	+$48M	+$45M
Working capital & othertiming of cash in and out, other non-cash items	+$2.0B	−$1.7B	−$513M	−$472M	−$130M
Cash from operations	$3.3B	$3.6B	$3.2B	$3.2B	$3.3B
Maintenance capital expenditurethe spending needed just to hold position and volume	−$1.6B	−$1.5B	−$1.4B	−$1.3B	−$1.3B
Owner earnings	$1.7B	$2.2B	$1.8B	$1.8B	$2.0B
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$5.5B	−$5.3B	−$3.3B	−$1.6B	−$1.1B
Free cash flow	($3.8B)	($3.1B)	($1.4B)	$244M	$871M
Owner-earnings marginowner earnings ÷ revenue	14%	18%	15%	14%	20%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $1.6B, roughly its depreciation, the rate its assets wear out). The other $5.5B of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $76M), owner earnings is nearer $1.6B.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? -4.1×

Does not cover its interest

Operating income ($877M) ÷ interest expense $214M

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? $15.8B

Net debt against an operating loss

Cash $1.9B − debt $17.7B

What this means
Netting $1.9B of cash and short-term investments against $17.7B of debt leaves $15.8B owed, with no operating profit this year to measure it against — understand that combination before anything else about the company. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 28d

Tight

DSO 58 + DIO 34 − DPO 64 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 11%

Solid through the cycle

10-yr median, range -2%–14%; -2% latest = NOPAT ($693M) ÷ invested capital $30.9B

Industry peers: median 6%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran -2% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 18%

High through the cycle

10-yr median margin, range 14%–23%; latest $1.7B = operating cash $3.3B − maintenance capex $1.6B

Industry peers: median 8%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 14% of revenue this year, a 18% median across 10 years. It chose to put $5.5B more into growth, so free cash flow this year was ($3.8B) — the gap is investment, not weakness. Treating stock comp as the real expense it is (less $76M of SBC) leaves $1.6B.
Are earnings backed by cash? $3.3B

Loss, but cash-generative

Net income ($395M) · cash from operations $3.3B

In the filing’s words And the filing leans heavily on adjusted, non-GAAP earnings — steering you off the GAAP figure just where the cash is not backing it. Read the reconciliation in the notes before taking the adjusted number.

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

Where do the earnings go? 94%

Returns most of it

Dividends + buybacks $1.6B ÷ Owner Earnings $1.7B

What this means
Of $1.7B Owner Earnings, $1.6B (94%) went back to shareholders, $1.6B dividends, $0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 4.49×

Expanding

Capex $7.0B ÷ depreciation $1.6B

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $12.0B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.38×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $17.7B vs $1.6B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Near

A profit every year (10-yr record) · 1 loss year

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Near

Earnings +33% over the record · +12%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $8.58/share (latest year $-1.77), the averaged base the calculator's gate runs on, and book value is $67.47/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 9 of 10

What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 20% → 16% (3-yr avg ends)

In the filing’s words The filing claims pricing power in its strongest form — price raised, volume held — yet the margin here has not widened to match. The claim leads the record; weigh them together.

What this means
Through the cycle the operating margin slipped — about 20% early to 16% lately, median 20% — competition or costs are biting in.
Reinvestment, incremental ROIC 2%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Owner earnings growth +4%/yr

What this means
Owner earnings grew about 4% a year over the record.
Worst year 2025 · −7.3% op. margin

What this means
Operations went underwater in 2025, understand why before trusting the good years.
Share count +0.2%/yr

What this means
Roughly flat share count, little dilution, little buyback.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.
How management talks about it Owner’s terms

What this means
The filing reasons in an owner’s terms — per-share, return on capital, the long term — and the record has held; the words and the results are of a piece.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Further, if we are unsuccessful in developing new technologies, including development and application of artificial intelligence, our development activities do not keep pace with those of our competitors, or if we do not create new technologies that benefit customers, our competitive position and operating results may …”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$5.0B

Cash & short-term investments$951M
Receivables$1.9B
Inventory$768M
Other current assets$1.4B

Current liabilities$3.5B

Debt due within a year$416M
Accounts payable$2.9B
Other current liabilities$240M

Current ratio1.43×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.21×stricter: inventory excluded

Cash ratio0.27×strictest: cash alone against what's due

Working capital$1.5Bthe cushion left after near-term bills

Debt due this year vs. cash$416M due · $951M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+8.8%the freshest read on whether the business is still growing

Current ratio, recent quarters1.3× → 1.4×

Deeper floors

Tangible book value$14.4Bequity stripped of goodwill & intangibles

Net current asset value($18.5B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$4.5B$692M of it operating leases

Deferred revenue$532Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$717M

'27$907M

'28$1.4B

'29$1.1B

'30$1.1B

later$12.7B

Bars scaled to the largest single year; “later” is everything due after 2030, shown apart since it dwarfs the years.

Due in the next 12 months$717Mthe first rung: what must be repaid or rolled over within the year

Within two years$1.6Bthe near wall, the part most exposed to today’s credit conditions

Biggest single year$1.4Bin 2028the lumpiest maturity, where a refinancing, if needed, is largest

Total scheduled principal$18.0Bevery year plus what lies beyond, as the footnote totals it

Against what the business has and earns

Cash & short-term investments, Mar 31, 2026$951M

One year of owner earnings (FY2025)$1.7B

Together, against $717M due next year3.7×

Cash on hand as of Mar 31, 2026 plus a year’s owner earnings comes to $2.6B against the $717M due in the twelve months after the Sep 30, 2025 schedule: 3.7 times it.

Maturity schedule extracted from the company’s Sep 30, 2025 annual report and reconciled to the total the table states.

How the cash was used, 2016–2025

Over the record, the business generated $30.2B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$31.9B · 106%
Dividends$11.8B · 39%

Returned to owners$11.8B
66% of the owner earnings the business produced over the span, $11.8B as dividends and $0 as buybacks.
Source of funding−$13.5B
Reinvestment and shareholder returns ran $13.5B beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $5.3B to $17.7B.
Net change in share count2.1%
The diluted count rose from 218M to 223M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record$7.11/sh
Paid in 10 of the years on record, the per-share dividend growing about 9% a year. It was never cut over the span.
Return on what it retained6%
Of the earnings it kept rather than paid out ($7.1B over the span), annual owner earnings (first three years vs last three) grew $440M, so each retained $1 added about 0.06 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Pay, as filed	“Actually paid”	Owner earnings
2021	$13.8M	−$8.9M	$2.0B
2022	$18.5M	$15.4M	$1.8B
2023	$22.1M	$27.9M	$1.8B
2024	$15.9M	$9.3M	$2.2B
2025	$11.8M	$8.9M	$1.7B
2025	$23.4M	$15.4M	$1.7B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Stock-based compensation$76M
The slice of the business handed to employees in shares this year, 1% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Air Products and Chemicals Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

2 of the 6 tests turned up something to look into; the other 4 came back clean.

Look hereIs it less profitable than it was?15.6% vs 17.9%
The owner-earnings margin averaged 17.9% early in the record and 15.6% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid debt outgrow the business?$5.3B → $17.7B
Debt rose from $5.3B to $17.7B while owner earnings went from about $1.5B to $1.9B — about 3.6 years of owner earnings in debt then, about 9.3 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

And these came back clean

Did the share count rise anyway?
Did reported profit become cash?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Acquisitions as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Industrial Gases

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
LINLinde plc	$34.0B	—	21.4%	8%	16%
PPGPPG Industries Inc.	$15.9B	41%	14.7%	16%	7%
MOSMosaic Company (The)	$12.1B	16%	8.2%	6%	7%
APDAir Products and Chemicals Inc.	$12.0B	31%	21.2%	12%	18%
WLKWestlake	$11.2B	19%	9.8%	6%	10%
IFFInternational Flavors & Fragrances Inc.	$10.9B	39%	8.9%	4%	8%
CECelanese	$9.5B	25%	14.1%	10%	13%
TROXTronox Holdings	$2.9B	23%	7.7%	3%	4%
Group median	—	25%	11.9%	7%	9%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Air Products and Chemicals Inc. has delivered.

Air Products and Chemicals Inc.’s latest year shows negative owner earnings, the mark of a build-out: total capital spending outruns the cash the business throws off today. So the tool opens on the steady-state base (maintenance capex in place of the build-out spend), the cash it would earn at rest; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, Air Products and Chemicals Inc. earns about $2.2B on its 18.1% median owner-earnings margin. This year’s 14.1% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($2.2B) Net of stock comp (−$48M) Steady-state · maintenance capex ($2.6B)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+0%/yr

Owner-earnings growth · ’16→’25+4%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow ($1.3B) on 223M shares outstanding, per the 10-Q cover, as of 2026-03-31; net debt $16.7B. The base opens on the steady-state figure (the latest year is negative on total capex mid-build-out); clear Steady-state to use the year as filed. Net of stock comp treats option pay as the expense it is. Capex ($5.4B) runs well above depreciation ($1.6B), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $2.6B, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh APD against another business →

Cite: Owner Scorecard, "Air Products and Chemicals Inc. (APD), the owner's record," https://ownerscorecard.com/c/APD, data as of 2026-07-09.

Manual order: ← APAM its page in the Manual APEI →

Industry order: the Industrial Gases chapter KRO →