LINCOLN ELECTRIC HOLDINGS (LECO) Stock Fundamental Analysis
USA - NASDAQ:LECO - US5339001068 - Common Stock
226.89 USD
-0.11 (-0.05%)
226.89 USD
0 (0%)
Overall LECO gets a fundamental rating of 6 out of 10. We evaluated LECO against 130 industry peers in the Machinery industry. LECO gets an excellent profitability rating and is at the same time showing great financial health properties. LECO is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year LECO was profitable.
In the past year LECO had a positive cash flow from operations.
In the past 5 years LECO has always been profitable.
Each year in the past 5 years LECO had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 13.75%, LECO belongs to the top of the industry, outperforming 92.31% of the companies in the same industry.
The Return On Equity of LECO (37.09%) is better than 95.38% of its industry peers.
LECO's Return On Invested Capital of 20.19% is amongst the best of the industry. LECO outperforms 96.15% of its industry peers.
LECO had an Average Return On Invested Capital over the past 3 years of 21.22%. This is significantly above the industry average of 10.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.75% | ||
| ROE | 37.09% | ||
| ROIC | 20.19% |
ROA(3y)14.74%
ROA(5y)12.76%
ROE(3y)40.81%
ROE(5y)36.11%
ROIC(3y)21.22%
ROIC(5y)19.81%
1.3 Margins
With an excellent Profit Margin value of 12.56%, LECO belongs to the best of the industry, outperforming 83.08% of the companies in the same industry.
In the last couple of years the Profit Margin of LECO has grown nicely.
LECO's Operating Margin of 17.54% is amongst the best of the industry. LECO outperforms 81.54% of its industry peers.
In the last couple of years the Operating Margin of LECO has grown nicely.
LECO's Gross Margin of 36.68% is fine compared to the rest of the industry. LECO outperforms 66.92% of its industry peers.
In the last couple of years the Gross Margin of LECO has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.54% | ||
| PM (TTM) | 12.56% | ||
| GM | 36.68% |
OM growth 3Y4.56%
OM growth 5Y5.34%
PM growth 3Y10.79%
PM growth 5Y3.57%
GM growth 3Y3.53%
GM growth 5Y1.97%
2. Health
2.1 Basic Checks
LECO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for LECO has been reduced compared to 1 year ago.
Compared to 5 years ago, LECO has less shares outstanding
The debt/assets ratio for LECO is higher compared to a year ago.
2.2 Solvency
LECO has an Altman-Z score of 6.65. This indicates that LECO is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of LECO (6.65) is better than 87.69% of its industry peers.
LECO has a debt to FCF ratio of 2.27. This is a good value and a sign of high solvency as LECO would need 2.27 years to pay back of all of its debts.
The Debt to FCF ratio of LECO (2.27) is better than 73.85% of its industry peers.
A Debt/Equity ratio of 0.88 indicates that LECO is somewhat dependend on debt financing.
LECO's Debt to Equity ratio of 0.88 is on the low side compared to the rest of the industry. LECO is outperformed by 75.38% of its industry peers.
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 | 0.88 | ||
| Debt/FCF | 2.27 | ||
| Altman-Z | 6.65 |
ROIC/WACC2.15
WACC9.38%
2.3 Liquidity
A Current Ratio of 1.71 indicates that LECO should not have too much problems paying its short term obligations.
LECO has a Current ratio of 1.71. This is in the lower half of the industry: LECO underperforms 62.31% of its industry peers.
A Quick Ratio of 1.07 indicates that LECO should not have too much problems paying its short term obligations.
The Quick ratio of LECO (1.07) is comparable to the rest of the industry.
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 | 1.71 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.99% 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 14.62% on average per year.
Looking at the last year, LECO shows a small growth in Revenue. The Revenue has grown by 3.24% in the last year.
LECO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.94% yearly.
EPS 1Y (TTM)6.99%
EPS 3Y14.33%
EPS 5Y14.62%
EPS Q2Q%15.42%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y7.42%
Revenue growth 5Y5.94%
Sales Q2Q%7.87%
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 9.54% on average per year.
Based on estimates for the next years, LECO will show a small growth in Revenue. The Revenue will grow by 5.96% on average per year.
EPS Next Y7.08%
EPS Next 2Y8.75%
EPS Next 3Y8.96%
EPS Next 5Y9.54%
Revenue Next Year6.35%
Revenue Next 2Y6.1%
Revenue Next 3Y5.77%
Revenue Next 5Y5.96%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
LECO is valuated rather expensively with a Price/Earnings ratio of 23.15.
LECO's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 26.06. LECO is around the same levels.
A Price/Forward Earnings ratio of 20.67 indicates a rather expensive valuation of LECO.
LECO's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of LECO to the average of the S&P500 Index (32.73), we can say LECO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.15 | ||
| Fwd PE | 20.67 |
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 in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.91 | ||
| EV/EBITDA | 16.14 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates LECO does not grow enough to justify the current Price/Earnings ratio.
LECO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.27
PEG (5Y)1.58
EPS Next 2Y8.75%
EPS Next 3Y8.96%
5. Dividend
5.1 Amount
LECO has a Yearly Dividend Yield of 1.39%. Purely for dividend investing, there may be better candidates out there.
LECO's Dividend Yield is a higher than the industry average which is at 1.85.
With a Dividend Yield of 1.39, LECO pays less dividend than the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
5.2 History
On average, the dividend of LECO grows each year by 8.56%, which is quite nice.
LECO has been paying a dividend for at least 10 years, so it has a reliable track record.
LECO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.56%
Div Incr Years24
Div Non Decr Years24
5.3 Sustainability
31.76% of the earnings are spent on dividend by LECO. This is a low number and sustainable payout ratio.
The dividend of LECO is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP31.76%
EPS Next 2Y8.75%
EPS Next 3Y8.96%
226.89
-0.11 (-0.05%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners81.51%
Inst Owner Change-1.99%
Ins Owners1.48%
Ins Owner Change-0.72%
Market Cap12.52B
Revenue(TTM)4.18B
Net Income(TTM)524.74M
Analysts76.67
Price Target263.18 (15.99%)
Short Float %1.86%
Short Ratio3.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
Yearly Dividend2.87
Dividend Growth(5Y)8.56%
DP31.76%
Div Incr Years24
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.05%
Min EPS beat(2)-0.08%
Max EPS beat(2)10.19%
EPS beat(4)2
Avg EPS beat(4)7.69%
Min EPS beat(4)-5.1%
Max EPS beat(4)25.75%
EPS beat(8)6
Avg EPS beat(8)5.39%
EPS beat(12)9
Avg EPS beat(12)4.35%
EPS beat(16)13
Avg EPS beat(16)5.44%
Revenue beat(2)1
Avg Revenue beat(2)0.75%
Min Revenue beat(2)-1%
Max Revenue beat(2)2.51%
Revenue beat(4)3
Avg Revenue beat(4)0.66%
Min Revenue beat(4)-1%
Max Revenue beat(4)2.51%
Revenue beat(8)4
Avg Revenue beat(8)-1.1%
Revenue beat(12)4
Avg Revenue beat(12)-1.59%
Revenue beat(16)8
Avg Revenue beat(16)-0.77%
PT rev (1m)1.1%
PT rev (3m)6.07%
EPS NQ rev (1m)-2%
EPS NQ rev (3m)1.2%
EPS NY rev (1m)1.14%
EPS NY rev (3m)7.43%
Revenue NQ rev (1m)-0.09%
Revenue NQ rev (3m)0.63%
Revenue NY rev (1m)0.65%
Revenue NY rev (3m)3.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.15 | ||
| Fwd PE | 20.67 | ||
| P/S | 3 | ||
| P/FCF | 22.91 | ||
| P/OCF | 18.92 | ||
| P/B | 8.85 | ||
| P/tB | 23.77 | ||
| EV/EBITDA | 16.14 |
EPS(TTM)9.8
EY4.32%
EPS(NY)10.98
Fwd EY4.84%
FCF(TTM)9.9
FCFY4.36%
OCF(TTM)12
OCFY5.29%
SpS75.67
BVpS25.63
TBVpS9.54
PEG (NY)3.27
PEG (5Y)1.58
Graham Number75.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.75% | ||
| ROE | 37.09% | ||
| ROCE | 26.39% | ||
| ROIC | 20.19% | ||
| ROICexc | 22.49% | ||
| ROICexgc | 34.35% | ||
| OM | 17.54% | ||
| PM (TTM) | 12.56% | ||
| GM | 36.68% | ||
| FCFM | 13.09% |
ROA(3y)14.74%
ROA(5y)12.76%
ROE(3y)40.81%
ROE(5y)36.11%
ROIC(3y)21.22%
ROIC(5y)19.81%
ROICexc(3y)24.29%
ROICexc(5y)22.63%
ROICexgc(3y)41.43%
ROICexgc(5y)36.86%
ROCE(3y)27.25%
ROCE(5y)25.47%
ROICexgc growth 3Y8.18%
ROICexgc growth 5Y9.37%
ROICexc growth 3Y1.83%
ROICexc growth 5Y4.58%
OM growth 3Y4.56%
OM growth 5Y5.34%
PM growth 3Y10.79%
PM growth 5Y3.57%
GM growth 3Y3.53%
GM growth 5Y1.97%
F-Score7
Asset Turnover1.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.88 | ||
| Debt/FCF | 2.27 | ||
| Debt/EBITDA | 1.49 | ||
| Cap/Depr | 120.16% | ||
| Cap/Sales | 2.77% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.88% | ||
| Profit Quality | 104.15% | ||
| Current Ratio | 1.71 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 6.65 |
F-Score7
WACC9.38%
ROIC/WACC2.15
Cap/Depr(3y)109.73%
Cap/Depr(5y)95.96%
Cap/Sales(3y)2.33%
Cap/Sales(5y)2.23%
Profit Quality(3y)91.73%
Profit Quality(5y)105.28%
High Growth Momentum
Growth
EPS 1Y (TTM)6.99%
EPS 3Y14.33%
EPS 5Y14.62%
EPS Q2Q%15.42%
EPS Next Y7.08%
EPS Next 2Y8.75%
EPS Next 3Y8.96%
EPS Next 5Y9.54%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y7.42%
Revenue growth 5Y5.94%
Sales Q2Q%7.87%
Revenue Next Year6.35%
Revenue Next 2Y6.1%
Revenue Next 3Y5.77%
Revenue Next 5Y5.96%
EBIT growth 1Y3.45%
EBIT growth 3Y12.31%
EBIT growth 5Y11.6%
EBIT Next Year22.32%
EBIT Next 3Y11.48%
EBIT Next 5Y10.58%
FCF growth 1Y-4.39%
FCF growth 3Y16.82%
FCF growth 5Y7.65%
OCF growth 1Y0.65%
OCF growth 3Y17.94%
OCF growth 5Y8.24%
LINCOLN ELECTRIC HOLDINGS / LECO FAQ
What is the fundamental rating for LECO stock?
ChartMill assigns a fundamental rating of 6 / 10 to LECO.
Can you provide the valuation status for LINCOLN ELECTRIC HOLDINGS?
ChartMill assigns a valuation rating of 3 / 10 to LINCOLN ELECTRIC HOLDINGS (LECO). This can be considered as Overvalued.
What is the profitability of LECO stock?
LINCOLN ELECTRIC HOLDINGS (LECO) has a profitability rating of 9 / 10.
Can you provide the financial health for LECO stock?
The financial health rating of LINCOLN ELECTRIC HOLDINGS (LECO) is 7 / 10.
What is the earnings growth outlook for LINCOLN ELECTRIC HOLDINGS?
The Earnings per Share (EPS) of LINCOLN ELECTRIC HOLDINGS (LECO) is expected to grow by 7.08% in the next year.