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4 Industrial-Gas Suppliers With Potential

These moat-worthy firms are poised for accelerating revenue and earnings growth in the years ahead.

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David Silver: We recently launched coverage of the industrial-gases industry. These are the companies that supply oxygen to steelmakers and petrochemical makers. They supply nitrogen to chipmakers and food processors. They supply argon to glassmakers and welders, and they supply hydrogen to oil refiners and fuel-cell makers. The four largest companies in the industry--Praxair (PX), Air Products (APD), Air Liquide (AI), and Linde (LIN)--account for 80% of industry revenues.

Industrial-gas suppliers possess sturdy economic moats, based on the long-term relationships they forge with their main customers. This, in turn, leads to meaningful barriers to entry, high switching costs, and valuable intangible assets.

David Silver does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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