The energy transition is on its way, but for most companies the tangible results won’t show up for years. At
the action is happening now, and the company’s stock isn’t fully reflecting that yet.
Chart (ticker: GTLS) makes cryogenic tanks and other equipment to freeze gases and make them easier to isolate and transport. Its products operate behind the scenes in a variety of industries, keeping soda bubbly and delivering oxygen to patients suffering from Covid-19. For now, Chart makes most of its money providing equipment to industrial-gas companies or fossil-fuel energy markets. But its stock offers a way to play both the rebound in traditional energy and the transition to new forms of it.
Chart is based in the small city of Ball Ground, Ga., but operates all over the globe. Its results have fluctuated with the fortunes of the natural-gas and chemical industries in recent years. Chart mostly persevered through the pandemic, growing earnings to $2.73 a share from $2.52 the previous year, on a slight decline in sales, to $1.2 billion. The company, however, has a record backlog of orders and is entering a much faster growth period, one that more than justifies its valuation of about 26 times next year’s expected earnings.
Chart specializes in taking volatile gases and processing them so they can be contained and transported. That can mean pumping them through heat exchangers, freezing and storing them in cryogenic tanks, and transporting them through insulated pipes. These technologies are used to turn natural gas into liquid form to be transported through pipes or overseas.
The company has benefited as the shale-drilling revolution and new laws helped the U.S. become a major exporter of natural gas. But the technology that makes it possible to capture natural gas is also useful for capturing and taming other gases.
Read More: Chart Industries Is a Small-Cap Play on Both Natural Gas and Hydrogen