Head to Head Review: Luxfer (LXFR) vs. Praxair (PX)

Luxfer (NYSE: LXFR) and Praxair (NYSE:PX) are both industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, institutional ownership, earnings, profitability and risk.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Luxfer and Praxair, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luxfer 0 0 0 0 N/A
Praxair 0 4 9 0 2.69

Praxair has a consensus target price of $174.45, suggesting a potential upside of 12.70%. Given Praxair’s higher possible upside, analysts plainly believe Praxair is more favorable than Luxfer.

Dividends

Luxfer pays an annual dividend of $0.50 per share and has a dividend yield of 2.8%. Praxair pays an annual dividend of $3.30 per share and has a dividend yield of 2.1%. Luxfer pays out 52.6% of its earnings in the form of a dividend. Praxair pays out 56.4% 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. Praxair has increased its dividend for 13 consecutive years. Luxfer is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Luxfer and Praxair’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Luxfer 3.04% 17.34% 6.88%
Praxair 11.27% 26.91% 8.73%

Insider and Institutional Ownership

82.2% of Luxfer shares are owned by institutional investors. Comparatively, 85.7% of Praxair shares are owned by institutional investors. 0.2% of Praxair shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Luxfer has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Praxair has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.

Earnings and Valuation

This table compares Luxfer and Praxair’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Luxfer $441.30 million 1.07 $11.50 million $0.95 18.83
Praxair $11.44 billion 3.89 $1.25 billion $5.85 26.46

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

Summary

Praxair beats Luxfer on 14 of the 16 factors compared between the two stocks.

About Luxfer

Luxfer Holdings PLC, a materials technology company, designs, manufactures, and supplies high-performance materials, components, and high-pressure gas-containment devices for transportation, defense and emergency response, healthcare, and general industrial applications in Europe, North America, the Asia Pacific, and internationally. It operates in two segments, Gas Cylinders and Elektron. The Gas Cylinders segment manufactures and markets aluminum and composite cylinders and systems, which are used in self-contained breathing apparatus, fire extinguishers, alternative fuels, bulk gas transportation, specialty gases, medical, beverages, scuba, and aerospace applications under the Luxfer Gas Cylinders brand. This segment also designs and manufactures aluminum, titanium, and magnesium plates for use in aerospace, automotive, rail, and medical products under the Superform brand. The Elektron segment focuses on specialty materials based on magnesium, zirconium, and rare earths. It develops and manufactures magnesium alloys; magnesium powders; and magnesium, copper, and zinc photoengraving plates. This segment also develops and manufactures specialty zirconium products, including zirconium-based materials, zirconium oxides, fiber-optic fuel cells, and other products. The company was founded in 1898 and is based in Manchester, the United Kingdom.

About Praxair

Praxair, Inc. produces and distributes industrial gases. It operates through five segments: North America, Europe, South America, Asia, and Surface Technologies. The company 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. It also supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders to the aircraft, energy, printing, primary metals, petrochemical, textile, and other industries. In addition, the company offers electric arc, plasma and wire spray, and high-velocity oxy-fuel equipment; and distributes hardgoods and welding equipment purchased from independent manufacturers. It serves various industries, such as healthcare, petroleum refining, manufacturing, food, beverage carbonation, fiber-optics, steel making, aerospace, chemicals, and water treatment. Praxair, Inc. was founded in 1907 and is headquartered in Danbury, Connecticut.

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