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If You Invested $1000 in Linde a Decade Ago, This is How Much It'd Be Worth Now

For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.

The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.

What if you'd invested in Linde (LIN) ten years ago? It may not have been easy to hold on to LIN for all that time, but if you did, how much would your investment be worth today?

Linde's Business In-Depth

With that in mind, let's take a look at Linde's main business drivers.

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Linde plc, based in Guildford, the United Kingdom, is a leading producer of industrial gases that are being utilized in various industries like chemicals & refining, food & beverage, electronics, healthcare, manufacturing and primary metals.

With a wide range of applications for its industrial gases, the company is making the world more productive by the day. Its primary products in industrial gases include oxygen, which is being used for life support in hospitals. The company’s process gas like hydrogen is being utilized for clean fuels, while its high-purity and specialty gases are being employed for manufacturing electronics. Moreover, while delivering state-of-the-art solutions related to gas processing, the company is helping the world reduce emissions.

In October 2018, a compelling combination of Praxair and Linde AG created Linde plc. With the combination of Linde AG’s engineering and technology along with Praxair’s operational excellence, Linde has become a global industrial gas leader. Importantly, the merger has created a more diversified company with significantly higher exposure to long-term macro growth trends. With stronger balance sheet, the merged company is financially more flexible to invest in key growth projects.

It is to be taken into consideration that the company has a significant project backlog that will drive sales. In fact, the company has sale-of-gas backlog of $3.5 billion at Dec 31, 2021. From its Engineering business, which is separated from industrial gases operations, the company has a backlog of $9.6 billion, securing future cashflows.

The company is also committed in returning capital to shareholders. In 2021, the company repurchased $4.6 billion in ordinary shares and paid $2.2 billion dividends.

Linde has three main reportable segments, comprising Americas, EMEA (Europe/Middle East/Africa), and APAC (Asia/South Pacific). Each of the segments was responsible for a respective 47%, 26% and 21% of total operating profit in 2021. The Engineering unit, another business segment, was responsible for the remaining 7% of 2021 operating profit.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Linde ten years ago, you're likely feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in February 2013 would be worth $2,975.63, or a 197.56% gain, as of February 3, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.

In comparison, the S&P 500 gained 176.23% and the price of gold went up 10.19% over the same time frame.

Analysts are anticipating more upside for LIN.

With a wide range of applications for its industrial gases, Linde is making the world more productive by the day. The company’s primary products in industrial gases include oxygen, which is used as life support in hospitals. Its process gas, like hydrogen, is being utilized for clean fuels, while its high-purity and specialty gases are employed to manufacture electronics. Linde has long-term contracts with on-site customers backed by minimum purchase requirements, thereby securing stable cashflows. In the profitable industrial gas market, the merger of Praxair and Linde has created an efficient player with considerable size advantages. However, the cost of sales continues to increase, hurting the firm’s bottom line. The firm has mostly been paying a lower dividend yield than the industry’s composite stocks over the past two years.

Over the past four weeks, shares have rallied 8.69%, and there have been 2 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.

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