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If You Invested $1000 in Linde a Decade Ago, This is How Much It'd Be Worth Now

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How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.

What if you'd invested in Linde (LIN - Free Report) ten years ago? It may not have been easy to hold on to LIN for all that time, but if you did, how much would your investment be worth today?

Linde's Business In-Depth

With that in mind, let's take a look at Linde's main business drivers.

Linde plc, based in Guildford, the United Kingdom, is a leading producer of industrial gases that are being utilized in various industries like chemicals & refining, food & beverage, electronics, healthcare, manufacturing and primary metals.

With a wide range of applications for its industrial gases, the company is making the world more productive by the day. Its primary products in industrial gases include oxygen, which is being used for life support in hospitals. The company’s process gas like hydrogen is being utilized for clean fuels, while its high-purity and specialty gases are being employed for manufacturing electronics. Moreover, while delivering state-of-the-art solutions related to gas processing, the company is helping the world reduce emissions.

In October 2018, a compelling combination of Praxair and Linde AG created Linde plc. With the combination of Linde AG’s engineering and technology along with Praxair’s operational excellence, Linde has become a global industrial gas leader. Importantly, the merger has created a more diversified company with significantly higher exposure to long-term macro growth trends. With stronger balance sheet, the merged company is financially more flexible to invest in key growth projects.

It is to be taken into consideration that the company has a significant project backlog that will drive sales. In fact, the company has sale-of-gas backlog of $3.5 billion at Dec 31, 2021. From its Engineering business, which is separated from industrial gases operations, the company has a backlog of $9.6 billion, securing future cashflows.

The company is also committed in returning capital to shareholders. In 2022, the company repurchased $5.2 billion in ordinary shares and paid $2.3 billion dividends.

Linde has three main reportable segments, comprising Americas, EMEA (Europe/Middle East/Africa), and APAC (Asia/South Pacific). Each of the segments was responsible for a respective 47.2%, 25.5% and 21.1% of total operating profit in 2022. The Engineering unit, another business segment, was responsible for the remaining 7% of 2022 operating profit.

Bottom Line

Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Linde, if you bought shares a decade ago, you're likely feeling really good about your investment today.

A $1000 investment made in June 2013 would be worth $3,256.08, or a gain of 225.61%, as of June 29, 2023, according to our calculations. This return excludes dividends but includes price appreciation.

Compare this to the S&P 500's rally of 172.48% and gold's return of 48.84% over the same time frame.

Analysts are forecasting more upside for LIN too.

With a wide range of applications for its industrial gases, Linde is making the world more productive by the day. The company’s primary products in industrial gases include oxygen, which is used as life support in hospitals. Linde has long-term contracts with on-site customers backed by minimum purchase requirements, thereby securing stable cashflows. In the profitable industrial gas market, the merger of Praxair and Linde has created an efficient player with considerable size advantages. For 2023, Linde increased adjusted EPS guidance representing 9 year-over-year growth. However, the cost of sales continues to increase, hurting the firm’s bottom line. Also, high leverage may limit its financial flexibility.The firm has mostly been paying a lower dividend yield than the industry’s composite stocks over the past two years.

The stock is up 6.03% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2023. The consensus estimate has moved up as well.

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