Contrasting Elementis (OTCMKTS:ELMTY) and Linde (NASDAQ:LIN)

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

Risk and Volatility

Linde has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, Elementis has a beta of 0.09, indicating that its share price is 91% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Linde	20.44%	19.80%	9.17%
Elementis	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Linde and Elementis, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Linde	0	1	10	1	3.00
Elementis	0	0	0	0	0.00

Linde currently has a consensus price target of $543.27, indicating a potential upside of 4.02%. Given Linde’s stronger consensus rating and higher probable upside, research analysts clearly believe Linde is more favorable than Elementis.

Valuation & Earnings

This table compares Linde and Elementis”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Linde	$34.66 billion	6.97	$6.90 billion	$15.06	34.68
Elementis	$597.50 million	1.79	-$45.50 million	N/A	N/A

Linde has higher revenue and earnings than Elementis.

Insider & Institutional Ownership

82.8% of Linde shares are held by institutional investors. 0.3% of Linde shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Linde pays an annual dividend of $6.40 per share and has a dividend yield of 1.2%. Elementis pays an annual dividend of $0.19 per share and has a dividend yield of 2.5%. Linde pays out 42.5% of its earnings in the form of a dividend. Linde has raised its dividend for 5 consecutive years.

Summary

Linde beats Elementis on 14 of the 16 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 Elementis

Elementis plc operates as a specialty chemical company in the United Kingdom, rest of Europe, North America, and internationally. It operates in two segments, Performance Specialties and Personal Care. The Performance Specialties segment engages in the production of rheological modifiers and additives for decorative and industrial coatings; and production and supply of talc for use in plastics, coatings, technical ceramics, and paper sectors. The Personal Care segment provides rheological modifiers and compounded products, including active ingredients for antiperspirants (AP) deodorants for personal care manufacturers. The company offers personal care products for antiperspirants, color cosmetics, and skin care applications; and performance specialties products for architectural coatings, adhesives, sealants and construction additives, and talc applications. Elementis plc was founded in 1844 and is headquartered in London, the United Kingdom.