LINCOLN ELECTRIC HOLDINGS (LECO) Stock Fundamental Analysis
NASDAQ:LECO - Nasdaq - US5339001068 - Common Stock - Currency: USD
Overall LECO gets a fundamental rating of 6 out of 10. We evaluated LECO against 127 industry peers in the Machinery industry. LECO has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. While showing a medium growth rate, LECO is valued expensive at the moment.
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.
Each year in the past 5 years LECO had a positive operating cash flow.
1.2 Ratios
LECO's Return On Assets of 12.72% is amongst the best of the industry. LECO outperforms 88.98% of its industry peers.
Looking at the Return On Equity, with a value of 34.41%, LECO belongs to the top of the industry, outperforming 95.28% of the companies in the same industry.
LECO has a better Return On Invested Capital (20.27%) than 96.06% 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 10.77%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.72% | ||
| ROE | 34.41% | ||
| ROIC | 20.27% |
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
With an excellent Profit Margin value of 11.44%, LECO belongs to the best of the industry, outperforming 80.31% of the companies in the same industry.
LECO's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 16.98%, LECO is doing good in the industry, outperforming 79.53% of the companies in the same industry.
LECO's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 36.58%, LECO is doing good in the industry, outperforming 66.14% of the companies in the same industry.
LECO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.98% | ||
| PM (TTM) | 11.44% | ||
| GM | 36.58% |
OM growth 3Y4.56%
OM growth 5Y5.34%
PM growth 3Y10.79%
PM growth 5Y3.57%
GM growth 3Y3.53%
GM growth 5Y1.97%
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.
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.
LECO has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.83 indicates that LECO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.83, LECO belongs to the top of the industry, outperforming 86.61% of the companies in the same industry.
The Debt to FCF ratio of LECO is 2.36, which is a good value as it means it would take LECO, 2.36 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 2.36, LECO is doing good in the industry, outperforming 74.02% of the companies in the same industry.
A Debt/Equity ratio of 0.87 indicates that LECO is somewhat dependend on debt financing.
LECO has a Debt to Equity ratio of 0.87. This is in the lower half of the industry: LECO underperforms 74.02% 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 | 0.87 | ||
| Debt/FCF | 2.36 | ||
| Altman-Z | 6.83 |
ROIC/WACC2.1
WACC9.63%
2.3 Liquidity
LECO has a Current Ratio of 1.78. 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 Current ratio of 1.78. This is in the lower half of the industry: LECO underperforms 62.20% of its industry peers.
LECO has a Quick Ratio of 1.19. 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 (1.19) 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 | 1.78 | ||
| Quick Ratio | 1.19 |
3. Growth
3.1 Past
The earnings per share for LECO have decreased by -3.26% in the last year.
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 decreased by -2.46% 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)-3.26%
EPS 3Y14.33%
EPS 5Y14.62%
EPS Q2Q%-3.14%
Revenue 1Y (TTM)-2.46%
Revenue growth 3Y7.42%
Revenue growth 5Y5.94%
Sales Q2Q%2.36%
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 10.22% yearly.
Based on estimates for the next years, LECO will show a small growth in Revenue. The Revenue will grow by 5.51% on average per year.
EPS Next Y-0.33%
EPS Next 2Y4.75%
EPS Next 3Y5.56%
EPS Next 5Y10.22%
Revenue Next Year2.68%
Revenue Next 2Y3.55%
Revenue Next 3Y3.65%
Revenue Next 5Y5.51%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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
LECO is valuated rather expensively with a Price/Earnings ratio of 24.38.
Compared to the rest of the industry, the Price/Earnings ratio of LECO is on the same level as its industry peers.
When comparing the Price/Earnings ratio of LECO to the average of the S&P500 Index (27.53), we can say LECO is valued inline with the index average.
With a Price/Forward Earnings ratio of 22.05, LECO is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LECO is on the same level as its industry peers.
LECO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.71.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.38 | ||
| Fwd PE | 22.05 |
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 is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.47 | ||
| EV/EBITDA | 17.19 |
4.3 Compensation for Growth
The excellent profitability rating of LECO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.67
EPS Next 2Y4.75%
EPS Next 3Y5.56%
5. Dividend
5.1 Amount
LECO has a Yearly Dividend Yield of 1.35%.
LECO's Dividend Yield is a higher than the industry average which is at 1.87.
With a Dividend Yield of 1.35, LECO pays less dividend than the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.35% |
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 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
35.53% 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.
DP35.53%
EPS Next 2Y4.75%
EPS Next 3Y5.56%
NASDAQ:LECO (7/23/2025, 12:23:15 PM)
224.545
+1.23 (+0.55%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners80.56%
Inst Owner Change-0.67%
Ins Owners1.47%
Ins Owner Change1.49%
Market Cap12.54B
Analysts77.5
Price Target220.46 (-1.82%)
Short Float %1.76%
Short Ratio2.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.35% |
Yearly Dividend2.87
Dividend Growth(5Y)8.56%
DP35.53%
Div Incr Years24
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)10.33%
Min EPS beat(2)-5.1%
Max EPS beat(2)25.75%
EPS beat(4)3
Avg EPS beat(4)5.44%
Min EPS beat(4)-5.1%
Max EPS beat(4)25.75%
EPS beat(8)7
Avg EPS beat(8)5.11%
EPS beat(12)10
Avg EPS beat(12)4.4%
EPS beat(16)14
Avg EPS beat(16)5.5%
Revenue beat(2)2
Avg Revenue beat(2)0.56%
Min Revenue beat(2)0.3%
Max Revenue beat(2)0.82%
Revenue beat(4)2
Avg Revenue beat(4)-0.81%
Min Revenue beat(4)-2.69%
Max Revenue beat(4)0.82%
Revenue beat(8)3
Avg Revenue beat(8)-2.27%
Revenue beat(12)5
Avg Revenue beat(12)-1.56%
Revenue beat(16)8
Avg Revenue beat(16)-0.8%
PT rev (1m)1.89%
PT rev (3m)-8.03%
EPS NQ rev (1m)0.43%
EPS NQ rev (3m)-1.66%
EPS NY rev (1m)0.78%
EPS NY rev (3m)-2.04%
Revenue NQ rev (1m)0.47%
Revenue NQ rev (3m)2.41%
Revenue NY rev (1m)0.46%
Revenue NY rev (3m)1.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.38 | ||
| Fwd PE | 22.05 | ||
| P/S | 3.11 | ||
| P/FCF | 23.47 | ||
| P/OCF | 19.25 | ||
| P/B | 9.35 | ||
| P/tB | 23.81 | ||
| EV/EBITDA | 17.19 |
EPS(TTM)9.21
EY4.1%
EPS(NY)10.18
Fwd EY4.53%
FCF(TTM)9.57
FCFY4.26%
OCF(TTM)11.67
OCFY5.2%
SpS72.22
BVpS24
TBVpS9.43
PEG (NY)N/A
PEG (5Y)1.67
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.72% | ||
| ROE | 34.41% | ||
| ROCE | 25.78% | ||
| ROIC | 20.27% | ||
| ROICexc | 23.8% | ||
| ROICexgc | 37.09% | ||
| OM | 16.98% | ||
| PM (TTM) | 11.44% | ||
| GM | 36.58% | ||
| FCFM | 13.25% |
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%
ROICexcg growth 3Y8.18%
ROICexcg 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-Score6
Asset Turnover1.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.87 | ||
| Debt/FCF | 2.36 | ||
| Debt/EBITDA | 1.5 | ||
| Cap/Depr | 129.7% | ||
| Cap/Sales | 2.91% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.05% | ||
| Profit Quality | 115.81% | ||
| Current Ratio | 1.78 | ||
| Quick Ratio | 1.19 | ||
| Altman-Z | 6.83 |
F-Score6
WACC9.63%
ROIC/WACC2.1
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)-3.26%
EPS 3Y14.33%
EPS 5Y14.62%
EPS Q2Q%-3.14%
EPS Next Y-0.33%
EPS Next 2Y4.75%
EPS Next 3Y5.56%
EPS Next 5Y10.22%
Revenue 1Y (TTM)-2.46%
Revenue growth 3Y7.42%
Revenue growth 5Y5.94%
Sales Q2Q%2.36%
Revenue Next Year2.68%
Revenue Next 2Y3.55%
Revenue Next 3Y3.65%
Revenue Next 5Y5.51%
EBIT growth 1Y-5.84%
EBIT growth 3Y12.31%
EBIT growth 5Y11.6%
EBIT Next Year16.2%
EBIT Next 3Y9.48%
EBIT Next 5Y10.45%
FCF growth 1Y36.18%
FCF growth 3Y16.82%
FCF growth 5Y7.65%
OCF growth 1Y40.32%
OCF growth 3Y17.94%
OCF growth 5Y8.24%