As the editor of two natural resources newsletters, I stay closely attuned to various industry costs: the average cost to mine an ounce of gold, the cost to refine a barrel of oil into gasoline, the cost to produce and ship a ton of coal from Australia to China.

It goes without saying that fluctuations in these costs have a direct impact on the bottom line (and thus the share prices) of the companies involved. And in most cases, expenses are trending higher. Labor costs climb with each passing year as workers receive salary bumps. Businesses that lease property and equipment usually see annual rent increases. And, of course, the raw materials needed to make finished products have grown more expensive.

Many of these businesses aren’t in a position to raise prices, so they simply have to absorb the higher operating expenses and watch their profit margins get squeezed.

Trust me, the market hates margin contraction.

But there’s one small group of companies that don’t really have to worry about this. That’s because their primary raw material costs the same thing today that it did 10 or 20 years ago: nothing. They essentially take something that’s free and turn it into something else that fetches a nice price — talk about an attractive business model.

I’m talking about industrial gas suppliers. Using proprietary technologies, these guys harness the air around them and then separate it into pure atmospheric component gases such as oxygen, nitrogen and argon. Of course, the process itself isn’t free. But most supply arrangements allow inflationary increases in input costs (like electricity) to be passed through to customers, thereby minimizing margin erosion.

And demand tends to be predictably stable as well, since gases are usually sold under multiyear contracts with high renewal rates. Large industrial users can’t risk any supply disruptions. So to ensure a reliable stream and to minimize transportation costs, they have gas production plants built onsite, right next door to their plants and factories.

Once built, the owner essentially has a monopoly for a decade or longer.

All of this translates into remarkably consistent cash flows even under harsh economic conditions. And these mature companies return most of that cash to stockholders through reliable dividend payments. Case in point: Air Products & Chemicals (NYSE: APD) has lifted its distribution for 30 consecutive years.

But I’ve found an even better option, a global leader that has rewarded stockholders with a 329.9% total return over the past decade — tripling the 112.1% return of the S&P 500.

As North America’s largest supplier of bulk and specialty gases, Praxair (NYSE: PX) rakes in over $11 billion in annual sales. Among other assets, the company owns a 310-mile hydrogen pipeline system that runs along the Gulf Coast, which supports the delivery of everything from acetylene to xenon to more than a million customers in 50 countries. And those customers are hungrier than ever.

You might not realize it, but gases play a critical role in countless 21st-century applications, from lasers to solar panels to rocket propulsion systems.

These gases can enable factories to operate cleaner, safer, leaner and harder… all of which helps boost the bottom line.

Glass makers that utilize Praxair’s technology can cut their energy usage in half and slash harmful emissions by 90%. Steelmakers that install the firm’s advanced gas injection equipment in their furnaces realize an average cost savings of $1.2 million per year. And semiconductor manufacturers that use Praxair’s ultra-high-purity nitrogen can boost their product output by 80% without spending an extra dime on electricity.

But the biggest growth drivers are coming from the energy sector.

First, oil producers have perfected the technique of injecting gases like nitrogen and carbon dioxide into tired reservoirs to coax out more barrels. This enhanced recovery measure is being used on thousands of wells in the Permian Basin of West Texas alone. Second, you’ve got refineries, which need hydrogen to break down and convert heavy, sour crude into gasoline and other products. Finally, the shale revolution is spurring an unprecedented wave of construction activity aimed at liquefied natural gas (LNG) production.

Developers are currently pouring $200 billion into dozens of LNG export facilities here and abroad. And the key to this miraculous process involves gases like propane and nitrogen, which are used as refrigerants to super-chill natural gas to minus 260 degrees Fahrenheit.

Praxair has a century of experience under its belt. But 2013 just might be the best year yet. The company has several growth projects underway, including three world-class hydrogen plants to meet rising demand from the refinery-heavy Gulf Coast region. And it’s just beginning to absorb the assets from 17 specialty gas businesses that were acquired last year. Overseas, the company is picking up new customers in markets like Korea and China that are building new energy, petrochemical and manufacturing facilities.

All of this is starting to be felt where it counts. Praxair is now reporting record operating margins and revenue backlog ($2.6 billion) and just raised its earnings guidance by 10% to a hefty $6.10 per share.

You don’t outrun the S&P 500 for 15 years by accident. Praxair is a great business protected by a wide moat in an industry with excellent fundamentals. The well-managed company also continues to unlock productivity gains, as evidenced by industry-leading returns on capital approaching 15%.

Cost-cutting initiatives shaved expenses by $425 million last year, while operating cash flows expanded to hit a record $2.8 billion last year. That’s a winning combination for stockholders, who have already enjoyed 20 straight years of rising dividends.

Action to Take –> As long as industrial customers are interested in reducing expenses, increasing productivity and complying with environmental regulations, then Praxair should continue to deliver superior returns for stockholders.

I’m a buyer at this level.

P.S. — In a world of paper money and ballooning government debt, investors need real, tangible value. Nathan Slaughter’s Scarcity & Real Wealth aims to profit from the rarest and most valuable assets on the planet — gold, commodities, energy, and other natural resources. To learn more about this newsletter, and Nathan’s next big commodities play, click here.