Morningstar Rating

Stock Research and Analysis

by Basili Alukos, CPA, CFA

Bulls Say

The industrial gas industry has consolidated significantly since the late 1990s. This more favorable industry dynamic should reduce the intensity of rivalry and limit overcapacity.
Praxair is currently the market leader in North America and it also dominates South America with an estimated 65% of the Brazilian industrial gas market.
Steel mill customers are utilizing increased natural gas injection in their blast furnaces in lieu of coal, which boosts volumes since natural gas in the blast furnace requires about 25% more oxygen than coal. Read more 

Bears Say

Praxair said the internal rate of returns in its backlog has dipped to 15% per project from 18% a few years ago, suggesting stiffer competition in the emerging markets.
Increasing competition in China and India will represent major obstacles for Praxair's growth since success is contingent on replicating its U.S.-type operations overseas.
The construction period for large-scale onsite projects has increased over the last decade by at least a year or two. This has the potential to put a greater strain on cash flows, and result in lower project returns. Read more 

Management

CEO Stephen F. Angel became CEO in 2007. Before that, he served as executive vice president for Praxair's businesses in North America, Europe, and Asia. Beginning his tenure in 2001, Angel played a large role in Praxair's most recent growth. Before   Read more 

Profile

Praxair is the largest industrial gas supplier in North America and South America. The company has a growing presence in Asia and a well-established presence in Europe.   Read more 

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