LINCOLN ELECTRIC HOLDINGS (LECO) Stock Fundamental Analysis
USA - NASDAQ:LECO - US5339001068 - Common Stock
221.82 USD
+1.18 (+0.53%)
Taking everything into account, LECO scores 6 out of 10 in our fundamental rating. LECO was compared to 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.
LECO had a positive operating cash flow in the past year.
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
LECO has a better Return On Assets (13.75%) than 92.31% of its industry peers.
Looking at the Return On Equity, with a value of 37.09%, LECO belongs to the top of the industry, outperforming 95.38% of the companies in the same industry.
The Return On Invested Capital of LECO (20.19%) is better than 96.15% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LECO 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
The Profit Margin of LECO (12.56%) is better than 83.08% of its industry peers.
LECO's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 17.54%, LECO belongs to the top of the industry, outperforming 81.54% of the companies in the same industry.
In the last couple of years the Operating Margin of LECO has grown nicely.
LECO has a better Gross Margin (36.68%) than 66.92% of its industry peers.
LECO's Gross Margin has improved in the last couple of years.
| 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.
LECO has less shares outstanding than it did 1 year ago.
The number of shares outstanding for LECO has been reduced compared to 5 years ago.
Compared to 1 year ago, LECO has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 6.58 indicates that LECO is not in any danger for bankruptcy at the moment.
LECO has a better Altman-Z score (6.58) than 87.69% of its industry peers.
The Debt to FCF ratio of LECO is 2.27, which is a good value as it means it would take LECO, 2.27 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.27, LECO is in the better half of the industry, outperforming 73.85% of the companies in the same industry.
A Debt/Equity ratio of 0.88 indicates that LECO is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.88, LECO is not doing good in the industry: 75.38% of the companies in the same industry are doing better.
Although LECO does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.88 | ||
| Debt/FCF | 2.27 | ||
| Altman-Z | 6.58 |
ROIC/WACC2.16
WACC9.35%
2.3 Liquidity
A Current Ratio of 1.71 indicates that LECO should not have too much problems paying its short term obligations.
LECO's Current ratio of 1.71 is on the low side compared to the rest of the industry. LECO is outperformed by 64.62% of its industry peers.
LECO has a Quick Ratio of 1.07. This is a normal value and indicates that LECO is financially healthy and should not expect problems in meeting its short term obligations.
LECO has a Quick ratio of 1.07. This is in the lower half of the industry: LECO underperforms 61.54% of its industry peers.
LECO does not score too well on the current and quick ratio evaluation. However, as it has 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.
LECO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.62% yearly.
The Revenue has been growing slightly by 3.24% in the past 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
LECO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.54% yearly.
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
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 22.63, LECO is valued on the expensive side.
The rest of the industry has a similar Price/Earnings ratio as LECO.
LECO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.47.
Based on the Price/Forward Earnings ratio of 20.21, the valuation of LECO can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as LECO.
LECO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 35.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.63 | ||
| Fwd PE | 20.21 |
4.2 Price Multiples
LECO's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as LECO.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.4 | ||
| EV/EBITDA | 15.81 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of LECO may justify a higher PE ratio.
PEG (NY)3.2
PEG (5Y)1.55
EPS Next 2Y8.75%
EPS Next 3Y8.96%
5. Dividend
5.1 Amount
LECO has a Yearly Dividend Yield of 1.39%.
LECO's Dividend Yield is a higher than the industry average which is at 1.87.
Compared to an average S&P500 Dividend Yield of 2.44, LECO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
5.2 History
The dividend of LECO is nicely growing with an annual growth rate of 8.56%!
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
LECO pays out 31.76% of its income as dividend. This is a sustainable payout ratio.
LECO's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP31.76%
EPS Next 2Y8.75%
EPS Next 3Y8.96%
NASDAQ:LECO (11/19/2025, 2:58:08 PM)
221.82
+1.18 (+0.53%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners81.51%
Inst Owner Change-1.96%
Ins Owners1.48%
Ins Owner Change-1.07%
Market Cap12.24B
Revenue(TTM)4.18B
Net Income(TTM)524.74M
Analysts76.67
Price Target263.18 (18.65%)
Short Float %1.58%
Short Ratio2.54
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)-2.17%
EPS NQ rev (3m)-2.08%
EPS NY rev (1m)1.14%
EPS NY rev (3m)7.43%
Revenue NQ rev (1m)-0.18%
Revenue NQ rev (3m)-0.18%
Revenue NY rev (1m)0.65%
Revenue NY rev (3m)3.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.63 | ||
| Fwd PE | 20.21 | ||
| P/S | 2.93 | ||
| P/FCF | 22.4 | ||
| P/OCF | 18.49 | ||
| P/B | 8.65 | ||
| P/tB | 23.24 | ||
| EV/EBITDA | 15.81 |
EPS(TTM)9.8
EY4.42%
EPS(NY)10.98
Fwd EY4.95%
FCF(TTM)9.9
FCFY4.46%
OCF(TTM)12
OCFY5.41%
SpS75.67
BVpS25.63
TBVpS9.54
PEG (NY)3.2
PEG (5Y)1.55
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 | 6.58 |
F-Score7
WACC9.35%
ROIC/WACC2.16
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.