Beat The Market With A Scientific Legend

Did you know that Rudolf Diesel, inventor of the diesel engine, also invented the food grade ice cube? He came up with the idea while apprenticing for Carl von Linde.

Carl von Linde was the German equivalent to Thomas Edison, an inventor and entrepreneur who pioneered new technologies and created a number of revolutionary products. He built the first reliable compressed-ammonia refrigerator, developed a process for liquefying gases on a large scale, and was the first person to extract oxygen gas from the air.

Carl von Linde’s legacy lives on through the company he founded, Linde plc ($LIN).

Linde plc is the world's largest industrial gas supplier by both market share and revenue. Its business focuses on manufacturing and distributing atmospheric gases. These are gases most people are probably familiar with from high school science class: oxygen, nitrogen, hydrogen, and helium.

These gases are critical to a number of industries.

Linde supplies specialty gases to semiconductor plants and electronics manufacturers. The firm's oxygen and nitrogen is used in hospitals around the world. And, Linde gases are used to carbonate Coca-Cola and Pepsi products.

Despite being a business that few investors talk about, Linde plc is both a market-beater and an enormous company with operations all over the world. The firm has a $197 billion market cap, making Linde larger than many household names like Disney and Starbucks.

Over the past decade, the company has delivered an average annual total return of 17.03%. It has also raised its dividend at a pace that outpaces inflation, posting a 5-year compound annual dividend growth rate of 9.37%.

With a 1.42% starting yield and a P/E ratio of 25.78, Linde isn’t a cheap stock.

But, Linde plc has seen a massive sell-off over the past month. The stock is down by more than 7.60% since October 15th. So right now, this company is cheaper than it was a month ago.

Chemical stocks are cyclical and demand is currently weak.

Other chemical companies, like LyondellBasell, are down by more than 30% year-to-date. And Dow Inc. cut its dividend back in July when the payout ratio became unsustainable.

But, Linde plc is weathering the storm much better.

In fact, Linde is actually up +1.13% year-to-date.

Even with weak chemical demand and the recent sell-off, Linde has reaffirmed that they should see 5 - 6% adjusted earnings growth per share this year. And, with a dividend payout ratio of just 36.31%, Linde’s distributions are well-covered with room for future raises.

Linde plc isn’t necessarily a cheap stock. But it is cheaper than it was a month ago.

If you’re interested in chemical companies, this is one of the biggest and best.

The company has consistently beaten the market, raised its dividend at a rate that outpaces inflation, and maintained a low payout ratio that offers protection during downturns.

Linde is the rare chemical stock that offers stability and growth. And it could be a safe play on the beaten-down and out of favor chemical industry.

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Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.