Now that investing in the S&P 500 is going out of fashion, I want to highlight a European alternative with a deep moat. The industrial gases business is steadily growing and monopolistic in nature. There are a few significant players in the world, of which Linde and Air Liquide are clearly the largest. One could even speak of a duopoly, where this duo shares the market and enjoys good margins. It is very difficult for others to challenge their position.
Air Liquide’s valuation is high, with the P/E ratio hovering above thirty, but at this price, you get a high-quality and steadily growing business. As a joker, let’s mention the HYDROGEN card, which is also in the company’s deck.
Wikipedia:
Air Liquide S.A. is a French multinational company which supplies industrial gases and services to various industries including medical, chemical and electronic manufacturers. Founded in 1902, after Linde it is the second largest supplier of industrial gases by revenues and has operations in over 70 countries. It has headquarters at the 7th arrondissement of Paris. Air Liquide owned the patent for Aqua-Lung until it expired. Air Liquide’s headquarters are in Paris. It also has major sites in Japan, Houston, Newark, Delaware, Frankfurt, Shanghai and Dubai. The company’s research and development targets the creation of industrial gases, and gases that are used in products such as healthcare items, electronic chips, foods, and chemicals. The major R&D groups within Air Liquide focus on analysis, bioresources, combustion, membranes, modeling, and the production of hydrogen gas.