Financial Contrast: Linde (NASDAQ:LIN) and Westaim (OTCMKTS:WEDXF)

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

Volatility & Risk

Linde has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, Westaim has a beta of 0.22, meaning that its stock price is 78% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Linde	21.17%	19.38%	9.20%
Westaim	-123.33%	-6.91%	-6.03%

Institutional and Insider Ownership

82.8% of Linde shares are owned by institutional investors. 0.7% of Linde shares are owned by company insiders. Comparatively, 4.2% of Westaim shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Linde and Westaim”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Linde	$33.01 billion	6.01	$6.57 billion	$14.93	28.47
Westaim	$17.04 million	37.40	-$16.18 million	($1.69)	-11.30

Linde has higher revenue and earnings than Westaim. Westaim 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 ratings and price targets for Linde and Westaim, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Linde	0	1	7	2	3.10
Westaim	0	0	0	0	0.00

Linde presently has a consensus price target of $501.00, indicating a potential upside of 17.85%. Given Linde’s stronger consensus rating and higher possible upside, analysts clearly believe Linde is more favorable than Westaim.

Summary

Linde beats Westaim on 13 of the 15 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 Westaim

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.