Analyzing H. B. Fuller (NYSE:FUL) & Linde (NASDAQ:LIN)

H. B. Fuller (NYSE:FUL) and Linde (NASDAQ:LIN) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Insider and Institutional Ownership

95.9% of H. B. Fuller shares are held by institutional investors. Comparatively, 82.8% of Linde shares are held by institutional investors. 2.0% of H. B. Fuller shares are held by insiders. Comparatively, 0.7% of Linde shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares H. B. Fuller and Linde”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
H. B. Fuller	$3.50 billion	0.89	$130.26 million	$1.85	31.25
Linde	$33.50 billion	5.86	$6.57 billion	$14.93	28.17

Linde has higher revenue and earnings than H. B. Fuller. Linde is trading at a lower price-to-earnings ratio than H. B. Fuller, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares H. B. Fuller and Linde’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
H. B. Fuller	3.28%	11.49%	4.24%
Linde	20.20%	19.09%	9.19%

Analyst Ratings

This is a summary of current ratings and price targets for H. B. Fuller and Linde, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
H. B. Fuller	1	2	3	2	2.75
Linde	0	2	6	2	3.00

H. B. Fuller currently has a consensus target price of $67.75, suggesting a potential upside of 17.19%. Linde has a consensus target price of $508.83, suggesting a potential upside of 21.00%. Given Linde’s stronger consensus rating and higher probable upside, analysts clearly believe Linde is more favorable than H. B. Fuller.

Dividends

H. B. Fuller pays an annual dividend of $0.94 per share and has a dividend yield of 1.6%. Linde pays an annual dividend of $6.00 per share and has a dividend yield of 1.4%. H. B. Fuller pays out 50.8% of its earnings in the form of a dividend. Linde pays out 40.2% 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. H. B. Fuller has increased its dividend for 57 consecutive years and Linde has increased its dividend for 5 consecutive years. H. B. Fuller is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

H. B. Fuller has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Linde has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.

Summary

Linde beats H. B. Fuller on 11 of the 17 factors compared between the two stocks.

About H. B. Fuller

H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products. It operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, water-based, and solvent-based products for applications in various markets, including packaging, converting, nonwoven and hygiene, and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives comprising reactive, light cure, two-part liquids, polyurethane, silicone, film, and fast cure products to the durable assembly, performance wood and textile, transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly to customers, as well as through distributors and retailers in the Americas, Europe, India, the Middle East, Africa, and the Asia Pacific. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.

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.