Linde Plc (NASDAQ: LIN)

Sector: Basic Materials Industry: Specialty Chemicals CIK: 0001707925
Market Cap 218.63 Bn
P/B 5.48
P/E 38.41
P/S 6.61
ROIC (Qtr) 11.51
Div Yield % 1.44
Rev 1y % (Qtr) 3.10
Total Debt (Qtr) 25.93 Bn
Debt/Equity (Qtr) 0.67

About

Linde plc, also known as LIN, is a prominent player in the industrial gases industry, holding the position of the world's largest industrial gas company. It is renowned for its technological innovations and extensive range of products. The company's offerings include atmospheric gases such as oxygen, nitrogen, and argon, as well as process gases like carbon dioxide, hydrogen, and helium. Linde's reach extends across various industries, including healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics. The...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 10.13B provides exceptional 62.91x coverage of minority interest expenses 161M, showing strong core operations.
  • Operating cash flow of 10.13B provides exceptional 41.51x coverage of interest expenses 244M, showing strong debt service capability.
  • Operating cash flow of 10.13B provides strong 58.55x coverage of stock compensation 173M, indicating sustainable incentive practices.
  • Strong operating cash flow of 10.13B provides 3.01x coverage of SG&A expenses 3.37B, showing efficient operational cost management.
  • Tangible assets of 46.23B provide exceptional 36.15x coverage of deferred revenue 1.28B, showing strong service capability backing.

Bear case

  • Operating cash flow of 10.13B barely covers its investment activities of (5.64B), with a coverage ratio of -1.80, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 10.13B provides thin coverage of dividend payments of (2.77B) with a -3.65 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (5.64B) provide weak support for R&D spending of 151M, which is -37.32x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 4.51B provide limited coverage of acquisition spending of (488M), which is -9.24x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 5.33B relative to inventory of 2.13B (2.51 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Geographical Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Specialty Chemicals
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 LIN Linde Plc 218.63 Bn 38.41 6.61 25.93 Bn
2 SHW Sherwin Williams Co 110.34 Bn 170.54 11.54 13.58 Bn
3 ECL Ecolab Inc. 80.35 Bn 80.18 5.93 8.67 Bn
4 APD Air Products & Chemicals, Inc. 56.37 Bn 48.29 5.86 18.31 Bn
5 PPG Ppg Industries Inc 34.00 Bn 31.05 2.58 7.91 Bn
6 LYB LyondellBasell Industries N.V. 17.46 Bn 5.03 0.49 13.22 Bn
7 DD DuPont de Nemours, Inc. 16.63 Bn 3.65 0.32 8.90 Bn
8 ALB Albemarle Corp 14.44 Bn 48.94 6.36 3.63 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.70 1.52
EV to Cash from Ops. EV/CFO 26.45 12.52
EV to Debt EV to Debt 8.97 13.65
EV to EBIT EV/EBIT 31.09 21.45
EV to EBITDA EV/EBITDA 20.71 14.82
EV to Free Cash Flow [EV/FCF] EV/FCF 43.02 29.24
EV to Market Cap EV to Market Cap 1.06 3.84
EV to Revenue EV/Rev 7.02 89.11
Price to Book Value [P/B] P/B 5.48 5.48
Price to Earnings [P/E] P/E 38.41 16.02
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.56 -5.31
Dividend Payout Ratio % Div Payout % (Qtr) 39.20 -75.74
Dividend per Basic Share Div per Share (Qtr) 5.89 1.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 54.40 23.50
Interest Coverage Int. cover (Qtr) 38.43 -8.92
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -14.89 -1.67
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -13.07 72.99
Dividend Growth (1y) % Div 1y % (Qtr) 8.07 -3.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 10.45 -31.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 5.42 51.49
EBIT Growth (1y) % EBIT 1y % (Qtr) 9.24 0.57
EBT Growth (1y) % EBT 1y % (Qtr) 9.90 -80.35
EPS Growth (1y) % EPS 1y % (Qtr) 13.19 -90.82
FCF Growth (1y) % FCF 1y % (Qtr) 2.69 -50.40
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.62 219.02
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.39 0.70
Cash Payout Ratio Cash Payout (Qtr) 0.18 0.41
Cash Ratio Cash Ratio (Qtr) 0.28 1.28
Current Ratio Curr Ratio (Qtr) 0.82 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 0.67 0.92
Interest Cover Ratio Int Coverage (Qtr) 38.43 -8.92
Times Interest Earned Times Interest Earned (Qtr) 38.43 -8.92
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 39.10 -333.97
EBIT Margin % EBIT Margin % (Qtr) 27.99 -374.34
EBT Margin % EBT Margin % (Qtr) 27.26 -379.75
Gross Margin % Gross Margin % (Qtr) 48.80 29.26
Net Profit Margin % Net Margin % (Qtr) 21.20 -380.67