Linde (NASDAQ:LIN) versus FUCHS (OTCMKTS:FUPBY) Critical Review

Linde (NASDAQ:LIN) and FUCHS (OTCMKTS:FUPBY) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Institutional & Insider Ownership

82.8% of Linde shares are held by institutional investors. 0.7% of Linde shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Linde pays an annual dividend of $6.40 per share and has a dividend yield of 1.3%. FUCHS pays an annual dividend of $0.17 per share and has a dividend yield of 1.8%. Linde pays out 43.9% of its earnings in the form of a dividend. FUCHS pays out 27.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Linde has increased its dividend for 5 consecutive years. FUCHS is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Linde has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, FUCHS has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Earnings and Valuation

This table compares Linde and FUCHS”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Linde	$33.99 billion	6.78	$6.90 billion	$14.59	34.09
FUCHS	$3.81 billion	1.31	$326.79 million	$0.63	15.17

Linde has higher revenue and earnings than FUCHS. FUCHS is trading at a lower price-to-earnings ratio than Linde, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Linde and FUCHS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Linde	20.30%	19.52%	9.10%
FUCHS	8.30%	15.46%	11.14%

Analyst Ratings

This is a summary of current ratings and price targets for Linde and FUCHS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Linde	0	1	9	2	3.08
FUCHS	1	0	1	0	2.00

Linde presently has a consensus target price of $515.20, indicating a potential upside of 3.58%. Given Linde’s stronger consensus rating and higher possible upside, analysts plainly believe Linde is more favorable than FUCHS.

Summary

Linde beats FUCHS on 14 of the 18 factors compared between the two stocks.

About Linde

Linde plc operates as an industrial gas company in the Americas, Europe, the Middle East, Africa, Asia, and South Pacific. It offers atmospheric gases, including oxygen, nitrogen, argon, and rare gases; and process gases, such as carbon dioxide, helium, hydrogen, electronic gases, specialty gases, and acetylene. The company also designs and constructs turnkey process plants for third-party customers, as well as for the gas businesses in various locations, such as air separation, hydrogen, synthesis, olefin, and natural gas plants. It serves a range of industries, including healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics. The company was founded in 1879 and is based in Woking, the United Kingdom.

About FUCHS

Fuchs SE develops, produces, and sells lubricants and related specialties in Europe, the Middle East, Africa, the Asia Pacific, and North and South America. The company offers automotive lubricants, such as biodegradable lubricants, central and mobile hydraulic oils, dry coatings, engine and gear oils, motorcycle/two wheelers, and service fluids, as well as various oils for agriculture sector. It also provides industrial lubricants, including chain lubricants, dry coatings, gear and hydraulic oils, machine oils, open gear lubricants, rapidly biodegradable lubricants, compressor and refrigeration oils, release agents, slideways oils, fluids and industrial oils, textile machine oils, and turbine oils. In addition, the company offers lubricating greases comprising assembly pastes, biodegradable greases, food grade greases, multi-purpose/long-life greases, pastes for extreme temperatures, perfluorinated pastes, and wheel bearing greases, as well as gear boxes, and greases for central lubricating system, extreme temperature, machine tools, plain and roller bearings, rail vehicles, spray cans or rattle cans, and solid lubricants. Further, it provides metal processing lubricants consisting of cleaners, corrosion preventives, cutting and grinding, forming lubricants, and quenching oils; and special application lubricants for application equipment, chain lubrication, dry coatings, food and beverage, gears, sugar processing, railway traffic, plain and roller bearings, glass manufacturing process, hot forming, maintenance, open gears, pastes, release agents, other specialties, special greases, and wind power plants. Additionally, the company offers open gear and surface coating services. The company was formerly known as Fuchs Petrolub SE and changed its name to Fuchs SE in July 2023. Fuchs SE was founded in 1931 and is headquartered in Mannheim, Germany.