Linde (NASDAQ:LIN – Get Free Report) and PPG Industries (NYSE:PPG – Get Free Report) are both large-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.
Insider and Institutional Ownership
82.8% of Linde shares are owned by institutional investors. Comparatively, 81.9% of PPG Industries shares are owned by institutional investors. 0.3% of Linde shares are owned by insiders. Comparatively, 0.3% of PPG Industries shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings and price targets for Linde and PPG Industries, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Linde | 0 | 1 | 11 | 1 | 3.00 |
| PPG Industries | 0 | 10 | 7 | 0 | 2.41 |
Earnings and Valuation
This table compares Linde and PPG Industries”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 | 6.85 | $6.90 billion | $15.06 | 34.08 |
| PPG Industries | $15.88 billion | 1.65 | $1.58 billion | $7.01 | 16.75 |
Linde has higher revenue and earnings than PPG Industries. PPG Industries is trading at a lower price-to-earnings ratio than Linde, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Linde and PPG Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Linde | 20.44% | 19.80% | 9.17% |
| PPG Industries | 9.83% | 21.68% | 7.85% |
Dividends
Linde pays an annual dividend of $6.40 per share and has a dividend yield of 1.2%. PPG Industries pays an annual dividend of $2.84 per share and has a dividend yield of 2.4%. Linde pays out 42.5% of its earnings in the form of a dividend. PPG Industries pays out 40.5% 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 raised its dividend for 5 consecutive years and PPG Industries has raised its dividend for 54 consecutive years. PPG Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Linde has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, PPG Industries has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.
Summary
Linde beats PPG Industries on 11 of the 18 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 PPG Industries
PPG Industries, Inc. manufactures and distributes paints, coatings, and specialty materials in the United States, Canada, the Asia Pacific, Latin America, Europe, the Middle East, and Africa. It operates through two segments, Performance Coatings and Industrial Coatings. The Performance Coatings segment offers coatings, solvents, adhesives, sealants, sundries, and software for automotive and commercial transport/fleet repair and refurbishing, light industrial coatings, and specialty coatings for signs; wood stains; paints, thermoplastics, pavement marking products, and other advanced technologies for pavement marking for government, commercial infrastructure, painting, and maintenance contractors; and coatings, sealants, transparencies, transparent armor, adhesives, engineered materials, and packaging and chemical management services for commercial, military, regional jet, and general aviation aircraft. The Industrial Coatings segment offers coatings, adhesives and sealants, and metal pretreatments, as well as services and coatings applications for appliances, agricultural and construction equipment, consumer electronics, automotive parts and accessories, building products, kitchenware, and transportation vehicles and other finished products; and on-site coatings services. It also provides coatings for metal cans, closures, plastic and aluminum tubes for food, beverage and personal care, promotional, and specialty packaging; amorphous precipitated silica for tire, battery separator, and other end-uses; TESLIN substrates for labels, e-passports, drivers' licenses, breathable membranes, and loyalty and identification cards; and organic light emitting diode materials, displays and lighting lens materials, optical lenses, color-change products, and photochromic dyes. PPG Industries, Inc. was incorporated in 1883 and is headquartered in Pittsburgh, Pennsylvania.
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