Sensient Technologies (NYSE:SXT – Get Free Report) and Linde (NASDAQ:LIN – Get Free Report) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.
Profitability
This table compares Sensient Technologies and Linde’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sensient Technologies | 8.71% | 13.12% | 6.97% |
| Linde | 20.44% | 19.80% | 9.17% |
Valuation and Earnings
This table compares Sensient Technologies and Linde”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sensient Technologies | $1.61 billion | 3.15 | $134.49 million | $3.39 | 35.15 |
| Linde | $33.99 billion | 7.01 | $6.90 billion | $15.06 | 34.24 |
Linde has higher revenue and earnings than Sensient Technologies. Linde is trading at a lower price-to-earnings ratio than Sensient Technologies, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Sensient Technologies has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, Linde has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.
Dividends
Sensient Technologies pays an annual dividend of $1.64 per share and has a dividend yield of 1.4%. Linde pays an annual dividend of $6.40 per share and has a dividend yield of 1.2%. Sensient Technologies pays out 48.4% of its earnings in the form of a dividend. Linde pays out 42.5% 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.
Analyst Ratings
This is a summary of current ratings and target prices for Sensient Technologies and Linde, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sensient Technologies | 0 | 1 | 2 | 1 | 3.00 |
| Linde | 0 | 1 | 10 | 1 | 3.00 |
Sensient Technologies presently has a consensus price target of $134.00, indicating a potential upside of 12.44%. Linde has a consensus price target of $541.91, indicating a potential upside of 5.10%. Given Sensient Technologies’ higher probable upside, equities analysts plainly believe Sensient Technologies is more favorable than Linde.
Insider & Institutional Ownership
90.9% of Sensient Technologies shares are owned by institutional investors. Comparatively, 82.8% of Linde shares are owned by institutional investors. 1.3% of Sensient Technologies shares are owned by insiders. Comparatively, 0.3% of Linde shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Summary
Linde beats Sensient Technologies on 10 of the 16 factors compared between the two stocks.
About Sensient Technologies
Sensient Technologies Corporation, together with its subsidiaries, develops, manufactures, and markets colors, flavors, and other specialty ingredients in North America, Europe, Asia, Australia, South America, and Africa. The company offers flavor-delivery systems, and compounded and blended products; ingredient products, such as essential oils, natural and synthetic flavors, and natural extracts; and chili powder, paprika, and chili pepper, as well as dehydrated vegetables comprising parsley, celery, and spinach to the food, beverage, and personal care industries. It also provides natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, including colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications under the Sensient Food Colors, Sensient Pharmaceutical Coating Systems, Sensient Cosmetic Technologies, and Sensient Specialty Markets trade names. Sensient Technologies Corporation was incorporated in 1882 and is headquartered in Milwaukee, Wisconsin.
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.
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