Head-To-Head Contrast: Huabao International (OTCMKTS:HUIHY) vs. Linde (NASDAQ:LIN)

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

Volatility & Risk

Linde has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500. Comparatively, Huabao International has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500.

Dividends

Linde pays an annual dividend of $6.00 per share and has a dividend yield of 1.3%. Huabao International pays an annual dividend of $0.06 per share and has a dividend yield of 0.4%. Linde pays out 42.7% of its earnings in the form of a dividend. 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.

Earnings and Valuation

This table compares Linde and Huabao International”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Linde	$33.01 billion	6.74	$6.57 billion	$14.06	33.74
Huabao International	$469.25 million	1.88	-$53.62 million	N/A	N/A

Linde has higher revenue and earnings than Huabao International.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Linde	20.20%	19.09%	9.19%
Huabao International	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings and price targets for Linde and Huabao International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Linde	0	2	7	2	3.00
Huabao International	0	0	0	0	0.00

Linde currently has a consensus target price of $519.63, indicating a potential upside of 9.53%. Given Linde’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Linde is more favorable than Huabao International.

Institutional and Insider Ownership

82.8% of Linde shares are held by institutional investors. 0.7% of Linde shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Linde beats Huabao International on 15 of the 16 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 Huabao International

Huabao International Holdings Limited, an investment holding company, researches, develops, produces, distributes, and sells flavours and fragrances, food ingredients, tobacco and aroma raw materials, and condiment products primarily in the People's Republic of China. It offers paper-making reconstituted tobacco leaves and new materials products for the tobacco industry. The company is also involved in the production and sale of natural extracts; tobacco flavours and fragrances; filter materials; cigarette filters; synthetic perfumes; and food flavours and fragrances. Huabao International Holdings Limited was founded in 1996 and is headquartered in Wan Chai, Hong Kong.