LINCOLN ELECTRIC HOLDINGS (LECO)
US5339001068 - Common Stock
Overall LECO gets a fundamental rating of 7 out of 10. We evaluated LECO against 131 industry peers in the Machinery industry. LECO gets an excellent profitability rating and is at the same time showing great financial health properties. LECO has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year LECO was profitable.
LECO had a positive operating cash flow in the past year.
LECO had positive earnings in each of the past 5 years.
Each year in the past 5 years LECO had a positive operating cash flow.
1.2 Ratios
LECO has a Return On Assets of 13.17%. This is amongst the best in the industry. LECO outperforms 91.34% of its industry peers.
LECO has a Return On Equity of 36.03%. This is amongst the best in the industry. LECO outperforms 95.28% of its industry peers.
With an excellent Return On Invested Capital value of 19.91%, LECO belongs to the best of the industry, outperforming 95.28% of the companies in the same industry.
LECO had an Average Return On Invested Capital over the past 3 years of 21.33%. This is significantly above the industry average of 11.01%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.17% | ||
| ROE | 36.03% | ||
| ROIC | 19.91% |
ROA(3y)13.89%
ROA(5y)12.58%
ROE(3y)39.77%
ROE(5y)36.25%
ROIC(3y)21.33%
ROIC(5y)19.26%
1.3 Margins
The Profit Margin of LECO (11.93%) is better than 82.68% of its industry peers.
LECO's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 17.49%, LECO belongs to the best of the industry, outperforming 83.46% of the companies in the same industry.
In the last couple of years the Operating Margin of LECO has grown nicely.
LECO has a Gross Margin of 36.56%. This is in the better half of the industry: LECO outperforms 67.72% of its industry peers.
LECO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.49% | ||
| PM (TTM) | 11.93% | ||
| GM | 36.56% |
OM growth 3Y11.59%
OM growth 5Y5.2%
PM growth 3Y18.78%
PM growth 5Y6.53%
GM growth 3Y2.39%
GM growth 5Y0.75%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), LECO is creating value.
LECO has less shares outstanding than it did 1 year ago.
LECO has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, LECO has an improved debt to assets ratio.
2.2 Solvency
LECO has an Altman-Z score of 6.53. This indicates that LECO is financially healthy and has little risk of bankruptcy at the moment.
LECO has a better Altman-Z score (6.53) than 83.46% of its industry peers.
The Debt to FCF ratio of LECO is 2.45, which is a good value as it means it would take LECO, 2.45 years of fcf income to pay off all of its debts.
LECO has a Debt to FCF ratio of 2.45. This is in the better half of the industry: LECO outperforms 77.95% of its industry peers.
LECO has a Debt/Equity ratio of 0.94. This is a neutral value indicating LECO is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.94, LECO is not doing good in the industry: 82.68% of the companies in the same industry are doing better.
Even though the debt/equity ratio score it not favorable for LECO, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.94 | ||
| Debt/FCF | 2.45 | ||
| Altman-Z | 6.53 |
ROIC/WACC2.24
WACC8.89%
2.3 Liquidity
A Current Ratio of 1.85 indicates that LECO should not have too much problems paying its short term obligations.
LECO has a Current ratio of 1.85. This is in the lower half of the industry: LECO underperforms 62.99% of its industry peers.
A Quick Ratio of 1.20 indicates that LECO should not have too much problems paying its short term obligations.
LECO's Quick ratio of 1.20 is in line compared to the rest of the industry. LECO outperforms 45.67% of its industry peers.
The current and quick ratio evaluation for LECO is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.85 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.81% over the past year.
Measured over the past years, LECO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 14.34% on average per year.
LECO shows a decrease in Revenue. In the last year, the revenue decreased by -0.46%.
LECO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.71% yearly.
EPS 1Y (TTM)2.81%
EPS 3Y31.53%
EPS 5Y14.34%
EPS Q2Q%-10.83%
Revenue 1Y (TTM)-0.46%
Revenue growth 3Y16.44%
Revenue growth 5Y6.71%
Sales Q2Q%-4.79%
3.2 Future
Based on estimates for the next years, LECO will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.11% on average per year.
Based on estimates for the next years, LECO will show a small growth in Revenue. The Revenue will grow by 4.07% on average per year.
EPS Next Y-5.43%
EPS Next 2Y0.43%
EPS Next 3Y3.17%
EPS Next 5Y8.11%
Revenue Next Year-4.22%
Revenue Next 2Y-0.44%
Revenue Next 3Y1.37%
Revenue Next 5Y4.07%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 22.76 indicates a rather expensive valuation of LECO.
LECO's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 28.96. LECO is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 21.94 indicates a rather expensive valuation of LECO.
LECO's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 23.82. LECO is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.76 | ||
| Fwd PE | 21.94 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as LECO.
LECO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. LECO is cheaper than 65.35% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.84 | ||
| EV/EBITDA | 15.75 |
4.3 Compensation for Growth
LECO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.59
EPS Next 2Y0.43%
EPS Next 3Y3.17%
5. Dividend
5.1 Amount
LECO has a Yearly Dividend Yield of 1.45%.
LECO's Dividend Yield is a higher than the industry average which is at 1.54.
LECO's Dividend Yield is slightly below the S&P500 average, which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
5.2 History
The dividend of LECO is nicely growing with an annual growth rate of 10.33%!
LECO has paid a dividend for at least 10 years, which is a reliable track record.
LECO has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)10.33%
Div Incr Years23
Div Non Decr Years23
5.3 Sustainability
LECO pays out 32.89% of its income as dividend. This is a sustainable payout ratio.
LECO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP32.89%
EPS Next 2Y0.43%
EPS Next 3Y3.17%
LINCOLN ELECTRIC HOLDINGS
NASDAQ:LECO (11/21/2024, 8:00:02 PM)
After market: 208.51 0 (0%)208.51
+5.32 (+2.62%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap11.77B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.76 | ||
| Fwd PE | 21.94 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)1.59
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.17% | ||
| ROE | 36.03% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.49% | ||
| PM (TTM) | 11.93% | ||
| GM | 36.56% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.94 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.85 | ||
| Quick Ratio | 1.2 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)2.81%
EPS 3Y31.53%
EPS 5Y
EPS Q2Q%
EPS Next Y-5.43%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-0.46%
Revenue growth 3Y16.44%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y