1. Linde plc (NYSE:LIN)
Number of Hedge Fund Holders: 65
Linde plc (NYSE:LIN) ranks first on our list of the best dividend stocks from the international markets. The multinational industrial gases and engineering company holds a 29-year track record of consistent dividend growth. It currently pays a quarterly dividend of $1.39 per share and supports a dividend yield of 1.29%, as recorded on June 3.
Linde plc (NYSE:LIN)’s products are crucial to a wide range of industries such as chemicals, electronics, healthcare, energy, metals, and others. This diversity in its customer base enables the company to reduce the risks linked to a decline in any single industry. In the first quarter of 2024, the company’s revenue declined slightly by 1% to $8.1 billion. However, its operating profit of $2.1 billion showed a 6% growth from the same period last year. Moreover, the operating profit margin of 26% is also up 200 basis points. This shows that the company is managing its core operations efficiently and is effectively maintaining costs and expenses relative to its revenue. Linde plc (NYSE:LIN) mainly benefits from the lack of new significant competition in the market, making it unique in its field. Its close industrial gas competitor, Air Products and Chemicals, Inc. (NYSE:APD), has a market cap of over $60 billion, compared with Linde’s market cap of over $207 billion. In addition, LIN is generating more cash than APD, which is highly valued by dividend investors. In the most recent quarter, the company’s operating cash flow grew by 2% on a year-over-year basis at $2 billion. It returned approximately $1.7 billion to shareholders through dividends and share repurchases. The company’s free cash flow for the period came in at $906 million.
Linde plc (NYSE:LIN) has a forward P/E of 27.8, which may seem a little higher. However, given its strong earnings and growth prospects, this valuation could be justified. Moreover, the company is actively pursuing growth opportunities in the hydrogen sector that could significantly boost its revenue. The company’s earnings and returns have always been steady but took a turning point following its merger with Praxair back in 2018. This merger resulted in the combined entity generating $30 billion in annual revenues. Moreover, the stock has returned over 150% since 2018, outperforming the broader market.
Linde plc (NYSE:LIN) was included in 65 hedge fund portfolios at the end of Q1 2024, down from 74 in the previous quarter, according to our database. The stakes owned by these hedge funds have a consolidated value of nearly $4 billion.
While we acknowledge the potential of LIN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as LIN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None.
