Novozymes A/S (OTCMKTS:NVZMY) versus Linde (NASDAQ:LIN) Financial Contrast

Novozymes A/S (OTCMKTS:NVZMY) and Linde (NASDAQ:LIN) are both large-cap basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Dividends

Novozymes A/S pays an annual dividend of $0.81 per share and has a dividend yield of 1.3%. Linde pays an annual dividend of $6.40 per share and has a dividend yield of 1.3%. Novozymes A/S pays out 57.9% of its earnings in the form of a dividend. Linde pays out 43.9% 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 increased its dividend for 5 consecutive years.

Insider & Institutional Ownership

0.0% of Novozymes A/S shares are held by institutional investors. Comparatively, 82.8% of Linde shares are held by institutional investors. 0.7% of Linde shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Novozymes A/S and Linde, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novozymes A/S	0	1	0	1	3.00
Linde	0	1	9	1	3.00

Linde has a consensus target price of $521.60, suggesting a potential upside of 2.67%. Given Linde’s higher possible upside, analysts plainly believe Linde is more favorable than Novozymes A/S.

Risk & Volatility

Novozymes A/S has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Linde has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500.

Earnings & Valuation

This table compares Novozymes A/S and Linde”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novozymes A/S	$4.70 billion	5.30	$660.28 million	$1.40	42.96
Linde	$33.99 billion	6.93	$6.90 billion	$14.59	34.82

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

Profitability

This table compares Novozymes A/S and Linde’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Novozymes A/S	13.96%	6.37%	4.32%
Linde	20.30%	19.52%	9.10%

Summary

Linde beats Novozymes A/S on 13 of the 16 factors compared between the two stocks.

About Novozymes A/S

Novozymes A/S produces and sells industrial enzymes, microorganisms, and probiotics in Denmark, rest of Europe, North America, Asia Pacific, the Middle East, Africa, Latin America, and internationally. The company offers protein solutions for the food and beverage industry. It also offers industrial hygiene, drain openers, hard surface, medical cleaning, septic tanks, ware washing, and professional laundry services. In addition, the company provides dishwashing, softener, microbial and medical cleaning services. Further, it provides corn, cotton, forages, peanuts, pulses, soybeans, wheat, small grains, bioyield, and biocontrol solutions; warm water species, recirculating aquaculture system; animal health and nutrition solutions; fiber modification, bleach boosting, deposit control, and starch modification solutions. Additionally, the company provides carbon capture, leather and textiles solutions; enzyme solutions, including corn and wheat separation, liquefaction, saccharification, filtration, isomerization, maltose, and specialties solutions; warm water species and recirculating aquaculture system solutions; human health solutions, comprising brain, oral, protective and immune, and gastrointestinal health solutions; ethanol, biodiesel, renewable diesel, education, wastewater, and sewage sludge, and renewable diesel solutions; agriculture and industry, biogas food waste, food waste, biocatalysis, cell culture, diagnostics, enzyme, and biogas solutions. Furthermore, it provides lipases, proteases, oxidoreductases, and carbohydrases. Novozymes A/S was founded in 1925 and is based in Bagsvaerd, Denmark.

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.