LINCOLN ELECTRIC HOLDINGS (LECO)
US5339001068 - Common Stock
Taking everything into account, LECO scores 7 out of 10 in our fundamental rating. LECO was compared to 132 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 valued correctly, but it does not seem to be growing.
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.
In the past 5 years LECO always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of LECO (13.17%) is better than 90.77% of its industry peers.
LECO has a better Return On Equity (36.03%) than 95.38% of its industry peers.
The Return On Invested Capital of LECO (19.91%) is better than 95.38% of its industry peers.
The Average Return On Invested Capital over the past 3 years for LECO is significantly above the industry average of 10.90%.
| 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
LECO's Profit Margin of 11.93% is amongst the best of the industry. LECO outperforms 82.31% of its industry peers.
In the last couple of years the Profit Margin of LECO has grown nicely.
LECO has a better Operating Margin (17.49%) than 83.08% of its industry peers.
LECO's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 36.56%, LECO is in the better half of the industry, outperforming 66.15% of the companies in the same industry.
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so LECO 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 an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 6.26 indicates that LECO is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 6.26, LECO belongs to the best of the industry, outperforming 83.85% of the companies in the same industry.
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 76.15% 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: 81.54% 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 | 0.94 | ||
| Debt/FCF | 2.45 | ||
| Altman-Z | 6.26 |
ROIC/WACC2.27
WACC8.77%
2.3 Liquidity
LECO has a Current Ratio of 1.85. 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 worse Current ratio (1.85) than 62.31% 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 has a Quick ratio (1.20) which 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 | 1.85 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.81% over the past year.
LECO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.34% yearly.
Looking at the last year, LECO shows a decrease in Revenue. The Revenue has decreased by -0.46% in the last year.
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
The Earnings Per Share is expected to grow by 5.62% on average over the next years.
LECO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.04% yearly.
EPS Next Y-5.4%
EPS Next 2Y0.11%
EPS Next 3Y3.29%
EPS Next 5Y5.62%
Revenue Next Year-4.24%
Revenue Next 2Y-0.45%
Revenue Next 3Y1.38%
Revenue Next 5Y3.04%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
Based on the Price/Earnings ratio of 20.72, the valuation of LECO can be described as rather expensive.
Based on the Price/Earnings ratio, LECO is valued a bit cheaper than the industry average as 63.08% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.73, LECO is valued a bit cheaper.
With a Price/Forward Earnings ratio of 20.10, LECO is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LECO indicates a somewhat cheap valuation: LECO is cheaper than 60.77% of the companies listed in the same industry.
LECO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.72 | ||
| Fwd PE | 20.1 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as LECO.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LECO indicates a somewhat cheap valuation: LECO is cheaper than 68.46% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.78 | ||
| EV/EBITDA | 14.41 |
4.3 Compensation for Growth
LECO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.44
EPS Next 2Y0.11%
EPS Next 3Y3.29%
5. Dividend
5.1 Amount
LECO has a Yearly Dividend Yield of 1.58%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.69, LECO pays a bit more dividend than its industry peers.
LECO's Dividend Yield is slightly below the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.58% |
5.2 History
On average, the dividend of LECO grows each year by 10.33%, 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 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 Years24
Div Non Decr Years24
5.3 Sustainability
32.89% of the earnings are spent on dividend by LECO. This is a low number and sustainable payout ratio.
LECO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP32.89%
EPS Next 2Y0.11%
EPS Next 3Y3.29%
LINCOLN ELECTRIC HOLDINGS
NASDAQ:LECO (12/20/2024, 8:22:00 PM)
After market: 189.75 0 (0%)189.75
-0.14 (-0.07%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners80.54%
Inst Owner Change-1.26%
Ins Owners1.55%
Ins Owner Change0.29%
Market Cap10.71B
Analysts74.44
Price Target225.8 (19%)
Short Float %1.62%
Short Ratio3.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.58% |
Dividend Growth(5Y)10.33%
DP32.89%
Div Incr Years24
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.56%
Min EPS beat(2)0.04%
Max EPS beat(2)1.08%
EPS beat(4)4
Avg EPS beat(4)3.09%
Min EPS beat(4)0.04%
Max EPS beat(4)10.32%
EPS beat(8)7
Avg EPS beat(8)2.68%
EPS beat(12)11
Avg EPS beat(12)4.7%
EPS beat(16)15
Avg EPS beat(16)5.83%
Revenue beat(2)0
Avg Revenue beat(2)-2.18%
Min Revenue beat(2)-2.69%
Max Revenue beat(2)-1.67%
Revenue beat(4)1
Avg Revenue beat(4)-2.87%
Min Revenue beat(4)-7.43%
Max Revenue beat(4)0.33%
Revenue beat(8)1
Avg Revenue beat(8)-2.71%
Revenue beat(12)5
Avg Revenue beat(12)-1.24%
Revenue beat(16)7
Avg Revenue beat(16)-0.8%
PT rev (1m)2.12%
PT rev (3m)-1.81%
EPS NQ rev (1m)0.13%
EPS NQ rev (3m)-12.41%
EPS NY rev (1m)0.03%
EPS NY rev (3m)-2.76%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.74%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-1.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.72 | ||
| Fwd PE | 20.1 | ||
| P/S | 2.65 | ||
| P/FCF | 20.78 | ||
| P/OCF | 17.14 | ||
| P/B | 8 | ||
| P/tB | 20.58 | ||
| EV/EBITDA | 14.41 |
EPS(TTM)9.16
EY4.83%
EPS(NY)9.44
Fwd EY4.98%
FCF(TTM)9.13
FCFY4.81%
OCF(TTM)11.07
OCFY5.84%
SpS71.68
BVpS23.73
TBVpS9.22
PEG (NY)N/A
PEG (5Y)1.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.17% | ||
| ROE | 36.03% | ||
| ROCE | 26.08% | ||
| ROIC | 19.91% | ||
| ROICexc | 23.24% | ||
| ROICexgc | 35.12% | ||
| OM | 17.49% | ||
| PM (TTM) | 11.93% | ||
| GM | 36.56% | ||
| FCFM | 12.74% |
ROA(3y)13.89%
ROA(5y)12.58%
ROE(3y)39.77%
ROE(5y)36.25%
ROIC(3y)21.33%
ROIC(5y)19.26%
ROICexc(3y)24.05%
ROICexc(5y)21.83%
ROICexgc(3y)38.67%
ROICexgc(5y)33.96%
ROCE(3y)27.38%
ROCE(5y)24.66%
ROICexcg growth 3Y19.11%
ROICexcg growth 5Y6.21%
ROICexc growth 3Y14.08%
ROICexc growth 5Y3.03%
OM growth 3Y11.59%
OM growth 5Y5.2%
PM growth 3Y18.78%
PM growth 5Y6.53%
GM growth 3Y2.39%
GM growth 5Y0.75%
F-Score6
Asset Turnover1.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.94 | ||
| Debt/FCF | 2.45 | ||
| Debt/EBITDA | 1.59 | ||
| Cap/Depr | 125.89% | ||
| Cap/Sales | 2.71% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 78.63% | ||
| Profit Quality | 106.78% | ||
| Current Ratio | 1.85 | ||
| Quick Ratio | 1.2 | ||
| Altman-Z | 6.26 |
F-Score6
WACC8.77%
ROIC/WACC2.27
Cap/Depr(3y)91.37%
Cap/Depr(5y)86.61%
Cap/Sales(3y)2%
Cap/Sales(5y)2.11%
Profit Quality(3y)93.72%
Profit Quality(5y)107.35%
High Growth Momentum
Growth
EPS 1Y (TTM)2.81%
EPS 3Y31.53%
EPS 5Y14.34%
EPS Q2Q%-10.83%
EPS Next Y-5.4%
EPS Next 2Y0.11%
EPS Next 3Y3.29%
EPS Next 5Y5.62%
Revenue 1Y (TTM)-0.46%
Revenue growth 3Y16.44%
Revenue growth 5Y6.71%
Sales Q2Q%-4.79%
Revenue Next Year-4.24%
Revenue Next 2Y-0.45%
Revenue Next 3Y1.38%
Revenue Next 5Y3.04%
EBIT growth 1Y2.07%
EBIT growth 3Y29.93%
EBIT growth 5Y12.26%
EBIT Next Year7.43%
EBIT Next 3Y7.17%
EBIT Next 5Y7.06%
FCF growth 1Y64.5%
FCF growth 3Y25.43%
FCF growth 5Y17.45%
OCF growth 1Y63.74%
OCF growth 3Y23.85%
OCF growth 5Y15.19%