LINCOLN ELECTRIC HOLDINGS (LECO)
US5339001068 - Common Stock
Overall LECO gets a fundamental rating of 7 out of 10. We evaluated LECO against 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.
LECO had positive earnings in each of the past 5 years.
LECO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of LECO (16.17%) is better than 94.62% of its industry peers.
Looking at the Return On Equity, with a value of 41.80%, LECO belongs to the top of the industry, outperforming 96.15% of the companies in the same industry.
LECO has a better Return On Invested Capital (21.88%) than 97.69% of its industry peers.
The Average Return On Invested Capital over the past 3 years for LECO is significantly above the industry average of 10.78%.
The 3 year average ROIC (21.33%) for LECO is below the current ROIC(21.88%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.17% | ||
| ROE | 41.8% | ||
| ROIC | 21.88% |
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
With an excellent Profit Margin value of 13.23%, LECO belongs to the best of the industry, outperforming 85.38% of the companies in the same industry.
LECO's Profit Margin has improved in the last couple of years.
LECO's Operating Margin of 17.54% is amongst the best of the industry. LECO outperforms 83.85% of its industry peers.
In the last couple of years the Operating Margin of LECO has grown nicely.
LECO's Gross Margin of 35.93% is fine compared to the rest of the industry. LECO outperforms 68.46% of its industry peers.
LECO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.54% | ||
| PM (TTM) | 13.23% | ||
| GM | 35.93% |
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.
The debt/assets ratio for LECO has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 7.56 indicates that LECO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.56, LECO belongs to the top of the industry, outperforming 87.69% of the companies in the same industry.
LECO has a debt to FCF ratio of 1.91. This is a very positive value and a sign of high solvency as it would only need 1.91 years to pay back of all of its debts.
LECO's Debt to FCF ratio of 1.91 is amongst the best of the industry. LECO outperforms 81.54% of its industry peers.
LECO has a Debt/Equity ratio of 0.85. This is a neutral value indicating LECO is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.85, LECO is doing worse than 80.00% of the companies in the same industry.
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 | 0.85 | ||
| Debt/FCF | 1.91 | ||
| Altman-Z | 7.56 |
ROIC/WACC2.46
WACC8.89%
2.3 Liquidity
LECO has a Current Ratio of 2.24. This indicates that LECO is financially healthy and has no problem in meeting its short term obligations.
With a Current ratio value of 2.24, LECO perfoms like the industry average, outperforming 54.62% of the companies in the same industry.
A Quick Ratio of 1.49 indicates that LECO should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.49, LECO is doing good in the industry, outperforming 68.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.24 | ||
| Quick Ratio | 1.49 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.84% 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.
The Revenue has been growing slightly by 6.67% in the past year.
Measured over the past years, LECO shows a small growth in Revenue. The Revenue has been growing by 6.71% on average per year.
EPS 1Y (TTM)14.84%
EPS 3Y31.53%
EPS 5Y14.34%
EPS growth Q2Q4.69%
Revenue 1Y (TTM)6.67%
Revenue growth 3Y16.44%
Revenue growth 5Y6.71%
Revenue growth Q2Q-5.59%
3.2 Future
The Earnings Per Share is expected to grow by 8.74% on average over the next years. This is quite good.
LECO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.86% yearly.
EPS Next Y4.36%
EPS Next 2Y6.7%
EPS Next 3Y5.98%
EPS Next 5Y8.74%
Revenue Next Year3.6%
Revenue Next 2Y4.22%
Revenue Next 3Y3.82%
Revenue Next 5Y4.86%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 23.84, which indicates a rather expensive current valuation of LECO.
The rest of the industry has a similar Price/Earnings ratio as LECO.
When comparing the Price/Earnings ratio of LECO to the average of the S&P500 Index (28.60), we can say LECO is valued inline with the index average.
LECO is valuated rather expensively with a Price/Forward Earnings ratio of 21.16.
LECO's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.15, LECO is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.84 | ||
| Fwd PE | 21.16 |
4.2 Price Multiples
LECO's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LECO indicates a somewhat cheap valuation: LECO is cheaper than 64.62% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.33 | ||
| EV/EBITDA | 16.8 |
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)5.47
PEG (5Y)1.66
EPS Next 2Y6.7%
EPS Next 3Y5.98%
5. Dividend
5.1 Amount
LECO has a Yearly Dividend Yield of 1.24%. 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 1.66.
With a Dividend Yield of 1.24, LECO pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
5.2 History
On average, the dividend of LECO grows each year by 10.33%, which is quite nice.
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)10.33%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
27.75% 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.
DP27.75%
EPS Next 2Y6.7%
EPS Next 3Y5.98%
LINCOLN ELECTRIC HOLDINGS
NASDAQ:LECO (5/17/2024, 7:10:18 PM)
After market: 226.97 0 (0%)226.97
-1.29 (-0.57%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap12.92B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.84 | ||
| Fwd PE | 21.16 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)5.47
PEG (5Y)1.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.17% | ||
| ROE | 41.8% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.54% | ||
| PM (TTM) | 13.23% | ||
| GM | 35.93% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.24 | ||
| Quick Ratio | 1.49 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)14.84%
EPS 3Y31.53%
EPS 5Y
EPS growth Q2Q
EPS Next Y4.36%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.67%
Revenue growth 3Y16.44%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
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EBIT Next 5Y
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FCF growth 3Y
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