Nissan Chemical (OTCMKTS:NNCHY) vs. Linde (NASDAQ:LIN) Critical Analysis

Linde (NASDAQ:LIN) and Nissan Chemical (OTCMKTS:NNCHY) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Volatility and Risk

Linde has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500. Comparatively, Nissan Chemical has a beta of -0.2, indicating that its share price is 120% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Linde and Nissan Chemical, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Linde	0	3	7	1	2.82
Nissan Chemical	0	1	0	0	2.00

Linde currently has a consensus target price of $508.20, suggesting a potential upside of 5.65%. Given Linde’s stronger consensus rating and higher probable upside, equities analysts clearly believe Linde is more favorable than Nissan Chemical.

Profitability

This table compares Linde and Nissan Chemical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Linde	20.30%	19.52%	9.10%
Nissan Chemical	17.07%	19.04%	13.75%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Linde	$33.99 billion	6.61	$6.90 billion	$14.59	32.97
Nissan Chemical	$1.65 billion	4.08	$284.08 million	$2.29	21.67

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

Dividends

Linde pays an annual dividend of $6.00 per share and has a dividend yield of 1.2%. Nissan Chemical pays an annual dividend of $0.57 per share and has a dividend yield of 1.1%. Linde pays out 41.1% of its earnings in the form of a dividend. Nissan Chemical pays out 24.9% 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 raised its dividend for 5 consecutive years. Linde is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

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 large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Linde beats Nissan Chemical on 16 of the 18 factors compared between the two stocks.

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.

About Nissan Chemical

Nissan Chemical Corporation engages in the chemicals, performance materials, agricultural chemicals, and pharmaceuticals businesses in Japan and internationally. The company provides high purity chemicals; AdBlue, an urea solution; ammonia, sulfuric, and nitric acid, as well as concrete and civil engineering-related products; TEPIC, an epoxy compound; Melamine Cyanurate, a salt of melamine and iso cyanuric acid; TEPIC-VL, a liquid epoxy compound; TEPIC-FL, a liquid epoxy material; FOLDI-E101, an epoxy reactive diluent; Ecopromote, a nucleating agents for PLA; Nissan Reishi, a health food; phenylphosphonic acid; HI-LITE, a chlorinated isocyanulate; OPTBEADS, a melamine-formaldehyde resin and silica; and FINEOXOCOL, a saturated fatty alcohol and acid. It also offers performance materials comprising display, semiconductor, and inorganic materials; agricultural chemicals, such as herbicides, insecticides, fungicides, etc. for use on agricultural land, as well as in golf courses and parks; and drug substances for antiparasite drugs for animals. In addition, the company provides pharmaceutical products, such as LIVALO, a antihypercholesterolemic agent; LANDEL and FINTE, a long-acting calcium channel blocker; APIs and intermediaries; and manufacturing and process researching services for pharmaceutical ingredients. Further, it develops healthcare, information and communication materials, and environmental and energy materials. The company was formerly known as Nissan Chemical Industries, Ltd. and changed its name to Nissan Chemical Corporation in July 2018. Nissan Chemical Corporation was founded in 1887 and is headquartered in Tokyo, Japan.