243.75 USD
-7.13 (-2.84%)
243.75 USD
0 (0%)
LECO gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 130 industry peers in the Machinery industry. LECO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. LECO is valied quite expensively at the moment, while 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.
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
The Return On Assets of LECO (13.75%) is better than 91.54% of its industry peers.
LECO's Return On Equity of 37.09% is amongst the best of the industry. LECO outperforms 95.38% of its industry peers.
Looking at the Return On Invested Capital, with a value of 20.19%, LECO belongs to the top of the industry, outperforming 95.38% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for LECO is significantly above the industry average of 10.46%.
| 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 80.00% of its industry peers.
In the last couple of years the Profit Margin of LECO has grown nicely.
With an excellent Operating Margin value of 17.54%, 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 Operating Margin of LECO has grown nicely.
The Gross Margin of LECO (36.68%) is better than 67.69% 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so LECO is creating value.
The number of shares outstanding for LECO has been reduced compared to 1 year ago.
LECO has less shares outstanding than it did 5 years ago.
LECO has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.97 indicates that LECO is not in any danger for bankruptcy at the moment.
LECO's Altman-Z score of 6.97 is amongst the best of the industry. LECO outperforms 88.46% 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.
The Debt to Equity ratio of LECO (0.88) is worse than 75.38% of its industry peers.
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 | 6.97 |
ROIC/WACC2.14
WACC9.43%
2.3 Liquidity
LECO has a Current Ratio of 1.71. This is a normal value and indicates that LECO is financially healthy and should not expect problems in meeting 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 65.38% 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.
Looking at the Quick ratio, with a value of 1.07, LECO is doing worse than 60.77% of the companies in the same 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
LECO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.99%.
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.
The Revenue has been growing slightly by 3.24% in the past year.
The Revenue has been growing slightly by 5.94% on average over the past years.
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.
The Revenue is expected to grow by 5.96% on average over the next years.
EPS Next Y7.14%
EPS Next 2Y8.82%
EPS Next 3Y8.94%
EPS Next 5Y9.54%
Revenue Next Year6.47%
Revenue Next 2Y6.24%
Revenue Next 3Y5.82%
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
Based on the Price/Earnings ratio of 24.87, the valuation of LECO can be described as rather expensive.
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 26.76.
Based on the Price/Forward Earnings ratio of 22.18, the valuation of LECO can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LECO is on the same level as its industry peers.
LECO is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.96, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.87 | ||
| Fwd PE | 22.18 |
4.2 Price Multiples
LECO's Enterprise Value to EBITDA ratio is in line with the industry average.
LECO's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.54 | ||
| EV/EBITDA | 17.69 |
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)3.48
PEG (5Y)1.7
EPS Next 2Y8.82%
EPS Next 3Y8.94%
5. Dividend
5.1 Amount
LECO has a Yearly Dividend Yield of 1.29%. 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 1.84.
Compared to an average S&P500 Dividend Yield of 2.31, LECO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.29% |
5.2 History
The dividend of LECO is nicely growing with an annual growth rate of 8.56%!
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)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 2Y8.82%
EPS Next 3Y8.94%
243.75
-7.13 (-2.84%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners80.51%
Inst Owner Change-2.03%
Ins Owners1.48%
Ins Owner Change-0.72%
Market Cap13.41B
Revenue(TTM)4.18B
Net Income(TTM)524.74M
Analysts76.67
Price Target267.36 (9.69%)
Short Float %1.26%
Short Ratio1.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.29% |
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)1.59%
PT rev (3m)3.78%
EPS NQ rev (1m)0.18%
EPS NQ rev (3m)-1.9%
EPS NY rev (1m)0.06%
EPS NY rev (3m)0.47%
Revenue NQ rev (1m)0.18%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.87 | ||
| Fwd PE | 22.18 | ||
| P/S | 3.21 | ||
| P/FCF | 24.54 | ||
| P/OCF | 20.26 | ||
| P/B | 9.48 | ||
| P/tB | 25.46 | ||
| EV/EBITDA | 17.69 |
EPS(TTM)9.8
EY4.02%
EPS(NY)10.99
Fwd EY4.51%
FCF(TTM)9.93
FCFY4.07%
OCF(TTM)12.03
OCFY4.94%
SpS75.89
BVpS25.71
TBVpS9.57
PEG (NY)3.48
PEG (5Y)1.7
Graham Number75.29
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 | 6.97 |
F-Score7
WACC9.43%
ROIC/WACC2.14
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 Y7.14%
EPS Next 2Y8.82%
EPS Next 3Y8.94%
EPS Next 5Y9.54%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y7.42%
Revenue growth 5Y5.94%
Sales Q2Q%7.87%
Revenue Next Year6.47%
Revenue Next 2Y6.24%
Revenue Next 3Y5.82%
Revenue Next 5Y5.96%
EBIT growth 1Y3.45%
EBIT growth 3Y12.31%
EBIT growth 5Y11.6%
EBIT Next Year23.28%
EBIT Next 3Y12.48%
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 7.14% in the next year.