239.64 USD
-3.73 (-1.53%)
239.64 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to LECO. LECO was compared to 132 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 quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
LECO had positive earnings in the past year.
In the past year LECO had a positive cash flow from operations.
Each year in the past 5 years LECO has been profitable.
In the past 5 years LECO always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 13.75%, LECO belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
LECO's Return On Equity of 37.09% is amongst the best of the industry. LECO outperforms 95.45% of its industry peers.
The Return On Invested Capital of LECO (20.19%) is better than 94.70% 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 10.27%.
| 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
LECO's Profit Margin of 12.56% is amongst the best of the industry. LECO outperforms 80.30% of its industry peers.
In the last couple of years the Profit Margin of LECO has grown nicely.
The Operating Margin of LECO (17.54%) is better than 84.09% of its industry peers.
In the last couple of years the Operating Margin of LECO has grown nicely.
LECO has a better Gross Margin (36.68%) than 68.94% 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
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.
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 6.82 indicates that LECO is not in any danger for bankruptcy at the moment.
The Altman-Z score of LECO (6.82) is better than 87.88% 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.
With a decent Debt to FCF ratio value of 2.27, LECO is doing good in the industry, outperforming 74.24% of the companies in the same industry.
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 75.76% 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 | 6.82 |
ROIC/WACC2.16
WACC9.34%
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 64.39% 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 worse than 60.61% 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 | 1.71 | ||
| 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%.
The Earnings Per Share has been growing by 14.62% on average over the past years. This is quite good.
Looking at the last year, LECO shows a small growth in Revenue. The Revenue has grown by 3.24% in the last 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
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.
The Revenue is expected to grow by 5.96% on average over the next years.
EPS Next Y6.95%
EPS Next 2Y8.68%
EPS Next 3Y8.88%
EPS Next 5Y9.54%
Revenue Next Year6.47%
Revenue Next 2Y6.26%
Revenue Next 3Y5.84%
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.
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
A Price/Earnings ratio of 24.45 indicates a rather expensive valuation of LECO.
LECO's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of LECO to the average of the S&P500 Index (26.51), we can say LECO is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 21.86, the valuation of LECO can be described as rather expensive.
LECO's Price/Forward Earnings ratio is in line with the industry average.
LECO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.45 | ||
| Fwd PE | 21.86 |
4.2 Price Multiples
LECO's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as LECO.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.13 | ||
| EV/EBITDA | 16.95 |
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.
The excellent profitability rating of LECO may justify a higher PE ratio.
PEG (NY)3.52
PEG (5Y)1.67
EPS Next 2Y8.68%
EPS Next 3Y8.88%
5. Dividend
5.1 Amount
LECO has a Yearly Dividend Yield of 1.29%.
Compared to an average industry Dividend Yield of 0.98, LECO pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.00, LECO is paying slightly less dividend.
| 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 been paying a dividend for at least 10 years, so it has 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.
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 2Y8.68%
EPS Next 3Y8.88%
239.64
-3.73 (-1.53%)
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-0.46%
Market Cap13.19B
Revenue(TTM)4.18B
Net Income(TTM)524.74M
Analysts76.67
Price Target266.04 (11.02%)
Short Float %1.36%
Short Ratio2.11
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-DateN/A
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)-0.5%
PT rev (3m)2.19%
EPS NQ rev (1m)-0.75%
EPS NQ rev (3m)-2.73%
EPS NY rev (1m)-0.12%
EPS NY rev (3m)1.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.09%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)0.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.45 | ||
| Fwd PE | 21.86 | ||
| P/S | 3.16 | ||
| P/FCF | 24.13 | ||
| P/OCF | 19.92 | ||
| P/B | 9.32 | ||
| P/tB | 25.04 | ||
| EV/EBITDA | 16.95 |
EPS(TTM)9.8
EY4.09%
EPS(NY)10.96
Fwd EY4.57%
FCF(TTM)9.93
FCFY4.14%
OCF(TTM)12.03
OCFY5.02%
SpS75.89
BVpS25.71
TBVpS9.57
PEG (NY)3.52
PEG (5Y)1.67
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 | 6.82 |
F-Score7
WACC9.34%
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 Y6.95%
EPS Next 2Y8.68%
EPS Next 3Y8.88%
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 2Y6.26%
Revenue Next 3Y5.84%
Revenue Next 5Y5.96%
EBIT growth 1Y3.45%
EBIT growth 3Y12.31%
EBIT growth 5Y11.6%
EBIT Next Year23.11%
EBIT Next 3Y12.44%
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.
What is the valuation status of LINCOLN ELECTRIC HOLDINGS (LECO) stock?
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.
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 6.95% in the next year.
How sustainable is the dividend of LINCOLN ELECTRIC HOLDINGS (LECO) stock?
The dividend rating of LINCOLN ELECTRIC HOLDINGS (LECO) is 6 / 10 and the dividend payout ratio is 31.76%.