⚡ Gas giants of the future: who will lead the energy race? 🏁 Part 2:https://getqu.in/Mo9cBz/
Based on the ratio of EV to EBITDA, Nippon Sanso $AI (+1,56%) Liquide is the cheapest. However, the differences between the top two companies are not particularly large and follow the pattern of the USA being valued higher.
The payout ratio of $4091 (+3,8%) Sanso is very low and is expected to rise to around 30-35% in the coming years. Linde, on the other hand, is in a good position as the ratio is below 50%. The other two companies, where the ratio is over 50%, are rather high for capital-intensive companies of this size.
The return for shareholders at the companies is in the range of 2 to 4%, which is considered acceptable. $APD (-0,23%) On the other hand, the return for shareholders is negative, which indicates a brutally unfavorable situation for shareholders.
The ROIC of around 8% for the top three companies is an okay figure. For Nippon Sanso, the situation is less satisfactory, but at least the value shows an upward trend.
ROE is above the important threshold of 10% for all companies. At $LIN (+0,07%) has only seen a significant increase in the last few years and has almost reached the top position.
In terms of ROCE, Linde and Air Liquide are both close to each other and above the 10% mark.
In terms of ROTA, Linde is at the top and achieves almost double the result of the weakest of the four companies.
Conclusion
If I were to focus on just one company, it would be a difficult decision. Therefore, I look at two stocks, but still go through the decision-making process thoroughly. When I bring together all the relevant information about the industry and my personal priorities, I tend to see Linde as the preferred choice. The industry requires capital and Linde is the best positioned in this respect. In addition, the larger companies clearly benefit from being able to leverage their size effectively with banks and customers. Linde is well positioned in both Europe and America, and recent developments in the US have increased its focus on shareholder return. As an established brand, Linde also offers excellent diversification.
Air Products and Chemicals is also interesting, but has weaknesses compared to Linde in its ties to "heavy industry". Although this can have advantages, it has also brought disadvantages in recent years. I have therefore initially considered Air Liquide as a possible favorite. They are strongly positioned in many business areas and have a well-known brand, even if they have a "somewhat" weaker presence in the USA. However, their culture and domicile in Europe is super pronounced, which affects shareholder value a little.
If you want better diversification, which is the case with APC and Air Liquide as they cover different strengths, you should take the two, because you have to remember that Linde shares have only really gained in value in the last four years. Even though I personally would prefer Linde and Air Liquide, I actually think Air Liquide and APC are a better rational choice due to their diversified positioning and stable market position in the areas in which they operate.
And you buy shares for the future development and not the past.