Energy Mix for Your Portfolio: Linde, Zefiro Methane and TotalEnergies

Linde: Good Is Not Good Enough This Time

If you are looking for a solid yet high-performing "boring" stock in your portfolio, Linde has been the right choice in recent years. The gas manufacturer has built an extremely strong moat around its business and consistently generates high profits and margins. But this time, the market reacted coldly.

When the Q2 results were released, even minor disappointments were enough to send the stock tumbling. The company still managed to increase revenue by 9% compared to the same quarter last year, driven by higher volumes, acquisitions, and positive currency effects. According to management, demand remains high, particularly in the end markets of electronics, chemicals, energy, and manufacturing. Both revenue and earnings per share were slightly above market expectations. However, the decline in free cash flow apparently did not sit well with many market participants. At around USD 833 million, it was below the level of Q2 last year. The reason for this, however, lies in the record order backlog of USD 11 billion, which necessitated new investments in property, plant, and equipment of around USD 1.44 billion.

But that was not enough for investors. Many took profits, and the share fell by roughly 15% within a few weeks. The slight decline of 60 basis points in the operating margin likely played a role as well. The increased costs could not be fully offset by price adjustments and productivity gains.

The clouds hanging over Linde's stock may linger for some time. In the medium and long term, however, the company remains one of the top-tier stocks by global standards. Even though the margin has now declined slightly, customers are unlikely to switch providers anytime soon. For one thing, there are few alternatives. For another, these customers are often supplied directly from facilities located in the same industrial parks and connected to one another via pipeline. This saves money and strengthens the partnership with Linde. In addition, supply contracts are typically long-term.

Despite the correction, Linde's stock is still up by double digits in percentage terms since the start of the year. For investors with a long-term horizon for their portfolio, the stock's decline presents a buying opportunity. Since the chart is not yet stable in the short term, a staggered entry over two or three steps is advisable.

Zefiro Methane is filling the gaps left by the energy industry

Of course, there are also downsides when it comes to energy—whether it is wars over oil and gas wells, greenhouse gases, or simply the stench on highways or in city traffic. Zefiro Methane is tackling one such negative aspect. The Canadian company addresses abandoned and orphaned oil and gas wells, from which the extremely climate-damaging gas methane continues to leak. They are a remnant of North America's industrialization. In the US alone, there are said to be up to 4 million abandoned oil and gas wells. Many were not properly plugged, allowing climate-damaging gases like methane to escape. However, governments in Washington and at the state level have now recognized the problem and taken important steps. Funds have been allocated to plug these leaks, with a total of more than USD 4.5 billion set aside for this purpose. The total market size is estimated at around USD 400 billion, providing companies like Zefiro Methane with contracts and plenty of work.

Zefiro is one of the few pure players in this market. Through its subsidiary Plants & Goodwin, the company operates as a full-service provider, offering the entire value chain, from project planning to deep drilling and cementing to certification, all under one roof. According to Zefiro, this approach has enabled the company to win about a quarter of all tenders for which it has bid. In 2025 alone, Zefiro plugged more than 200 wells. The company is currently experiencing a boom due to the significant expansion of AI data centers. For these multi-billion-dollar projects, time is money. Zefiro Methane acts as a "first responder" here to quickly identify, measure, and plug orphaned wells sitting directly on land earmarked for new data centers and infrastructure corridors.

Zefiro Methane is currently valued on the stock market at the equivalent of approximately EUR 40 million. Following the sharp rise in the share price in 2025 and at the start of the year, a correction occurred. Given the strong order book, this could prove to be an attractive opportunity to buy in.

TotalEnergies: A Roller-Coaster Ride with the Oil Price

Shares of TotalEnergies have recently been on a roller-coaster ride, much like the stock markets. After negotiations between Iran and the United States regarding a ceasefire, the stock lost roughly a quarter of its value. Now, however, a genuine peace seems a long way off. The Iranians no longer wish to negotiate with Donald Trump until the end of his term, unless he fully accepts the agreements already negotiated in the Memorandum of Understanding. As a result, Total's stock rose sharply again.

For TotalEnergies shareholders, however, this is generally positive news. The price of oil has since risen significantly again. Diesel prices and refining margins are rising even more sharply worldwide. Cheap fuel for vehicles and trucks is unlikely to be available anytime soon. These developments are clearly reflected in TotalEnergies' financial results. The French company increased its revenue in the second quarter by 38.2% to USD 61.77 billion. Net income even doubled to USD 5.44 billion (+101.5%). The strong upstream business and higher refining margins had a positive impact here. Management has therefore increased the interim dividend from EUR 0.85 to EUR 0.90 per share. With free cash flow of USD 6.36 billion over three months, this is easily manageable. In addition, TotalEnergies is continuing its ongoing share buyback program at a rate of at least USD 750 million per quarter.

Strategically, the Paris-based company remains focused on renewable energy and liquefied natural gas. Just a few days ago, it announced the acquisition of a renewable energy portfolio from Shell, comprising approximately 500 MW of wind and solar capacity. It has also received approval for the final development plans for the Cronos offshore gas field in the eastern Mediterranean. The gas is to be liquefied via existing infrastructure in Egypt and delivered to Europe as LNG starting in 2028.

The stock is viewed largely positively by analysts. The overwhelming majority recommends buying. However, the consensus price targets are only about 10% above the current share price. With a P/E ratio of about 8, however, Total is significantly undervalued compared to US competitors such as ExxonMobil or Chevron.

Linde has disappointed investors somewhat, but the sharp correction appears excessive given the gas producer's market and pricing power. Zefiro Methane operates in its niche of orphaned oil and gas fields. The next earnings report could surprise. With TotalEnergies, investors can count on a solid dividend payer. However, the stock's performance is closely tied to the movement of oil prices.