AdvanSix (NYSE:ASIX) vs. Linde (NASDAQ:LIN) Critical Contrast

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

Earnings & Valuation

This table compares AdvanSix and Linde”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AdvanSix	$1.52 billion	0.31	$49.29 million	$1.81	9.83
Linde	$33.99 billion	6.93	$6.90 billion	$14.59	34.82

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

Analyst Recommendations

This is a summary of current recommendations and price targets for AdvanSix and Linde, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AdvanSix	1	1	1	0	2.00
Linde	0	2	8	2	3.00

AdvanSix currently has a consensus price target of $29.00, indicating a potential upside of 63.05%. Linde has a consensus price target of $508.20, indicating a potential upside of 0.02%. Given AdvanSix’s higher probable upside, analysts plainly believe AdvanSix is more favorable than Linde.

Dividends

AdvanSix pays an annual dividend of $0.64 per share and has a dividend yield of 3.6%. Linde pays an annual dividend of $6.00 per share and has a dividend yield of 1.2%. AdvanSix pays out 35.4% of its earnings in the form of a dividend. Linde pays out 41.1% 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. AdvanSix has raised its dividend for 2 consecutive years and Linde has raised its dividend for 5 consecutive years. AdvanSix is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AdvanSix	3.24%	6.97%	3.40%
Linde	20.30%	19.52%	9.10%

Risk and Volatility

AdvanSix has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500. Comparatively, Linde has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Institutional & Insider Ownership

86.4% of AdvanSix shares are owned by institutional investors. Comparatively, 82.8% of Linde shares are owned by institutional investors. 5.6% of AdvanSix shares are owned by company insiders. Comparatively, 0.7% of Linde shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Linde beats AdvanSix on 12 of the 18 factors compared between the two stocks.

About AdvanSix

AdvanSix Inc. engages in the manufacture and sale of polymer resins in the United States and internationally. It offers Nylon 6, a polymer resin, which is a synthetic material used to produce fibers, filaments, engineered plastics, and films. The company also provides caprolactam to manufacture polymer resins; ammonium sulfate fertilizers to distributors, farm cooperatives, and retailers; and acetone that are used in the production of adhesives, paints, coatings, solvents, herbicides, and engineered plastic resins, as well as other intermediate chemicals, including phenol, monoisopropylamine, dipropylamine, monoallylamine, alpha-methylstyrene, cyclohexanone, methyl ethyl ketoxime, acetaldehyde oxime, 2-pentanone oxime, cyclohexanol, sulfuric acid, ammonia, and carbon dioxide. It offers its products under the Aegis, Capran, Sulf-N, Nadone, Naxol, and EZ-Blox brands. The company sells its products directly, as well as through distributors. AdvanSix Inc. was incorporated in 2016 and is headquartered in Parsippany, New Jersey.

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.