9. Linde plc (NASDAQ:LIN)
Upside Potential as of December 13: 17.63%
Linde plc (NASDAQ:LIN) is a global industrial gases and engineering company. It provides a wide range of gases to industries like healthcare, manufacturing, energy, food and beverage, chemicals, and electronics. The company is a solid dividend payer because of its cash position. In the most recent quarter, it reported an operating cash flow of $2.73 billion, reflecting an 8% increase compared to the same period last year. Its free cash flow amounted to $1.66 billion. In the quarter, the company returned $1.3 billion to shareholders through dividends and stock buybacks. It maintains a 31-year streak of consistent dividend growth and offers a quarterly dividend of $1.39 per share. The stock has a dividend yield of 1.28%, as of December 13.
Despite ongoing economic challenges in the third quarter, Linde plc (NASDAQ:LIN) posted strong results, with a 9% increase in EPS, a rise in ROC to 25.8%, and a 130 basis point improvement in operating margins, reaching 29.6%. While managing short-term performance, the company also secured its largest-ever sale-of-gas project, expanding its project backlog to $10 billion. This achievement supports future growth in the traditional industrial gas sector while maintaining its commitment to disciplined investment practices. The stock is up by 6.26% in 2024 so far.
Linde plc (NASDAQ:LIN) posted revenue of $8.4 billion for the third quarter of 2024, reflecting a 2.46% increase compared to the same time last year. The company exceeded analysts’ expectations by $9.33 million. Its operating profit was $2.1 billion, with an operating profit margin of 25%.
Mar Vista Investment Partners, LLC mentioned LIN in its Q3 2024 investor letter. Here is what the firm has to say:
“Linde plc (NASDAQ:LIN) is the world’s largest, global industrial gas producer. The company enjoys the highest profit margins and returns on capital in the industry. Linde’s primary products are atmospheric gases and process gases. Industrial gases have benefitted from secular growth trends in decarbonization and carbon sequestration. Moreover, the opportunity in blue and green ammonia and hydrogen are substantial. Projects in these areas are quickly being added to its backlog for future growth. We see these secular trends as long-term positives for Linde and the entire industrial gas industry.
Linde believes it can grow its volumes with new applications; the buildout of small, on-site plants using its technologies; and focusing on growing geographies such as India, Malaysia, Vietnam, China and Brazil. Despite the long-term growth opportunities, recent demand trends have slowed due to weak global industrial production and a challenging year-over-year comparable. Among the regions, the U.S. remains resilient, with volumes flat to slightly negative. Europe, Latin America, the Middle East, and China are all sending mixed to negative economic signals. We believe these slower trends are transitory in nature, providing an opportunity to purchase shares in Linde at attractive prices.”
According to Insider Monkey’s database of Q3 2024, 63 hedge funds owned stakes in Linde plc (NASDAQ:LIN), which remained unchanged from the previous quarter. These stakes are worth over $3.6 billion in total.