252.34 USD
+1.34 (+0.53%)
252.34 USD
0 (0%)
Overall LECO gets a fundamental rating of 6 out of 10. We evaluated LECO against 132 industry peers in the Machinery industry. LECO gets an excellent profitability rating and is at the same time showing great financial health properties. 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.
LECO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
LECO has a Return On Assets of 13.75%. This is amongst the best in the industry. LECO outperforms 91.67% of its industry peers.
With an excellent Return On Equity value of 37.09%, LECO belongs to the best of the industry, outperforming 95.45% of the companies in the same industry.
With an excellent Return On Invested Capital value of 20.19%, LECO belongs to the best of the industry, outperforming 94.70% of the companies in the same industry.
LECO had an Average Return On Invested Capital over the past 3 years of 21.22%. This is significantly above the industry average of 10.22%.
| 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 has a better Profit Margin (12.56%) than 80.30% of its industry peers.
In the last couple of years the Profit Margin of LECO has grown nicely.
LECO's Operating Margin of 17.54% is amongst the best of the industry. LECO outperforms 83.33% of its industry peers.
LECO's Operating Margin has improved in the last couple of years.
LECO's Gross Margin of 36.68% is fine compared to the rest of the industry. LECO outperforms 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.
LECO has less shares outstanding than it did 1 year ago.
LECO has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, LECO has a worse debt to assets ratio.
2.2 Solvency
LECO has an Altman-Z score of 6.97. This indicates that LECO is financially healthy and has little risk of bankruptcy at the moment.
LECO has a better Altman-Z score (6.97) 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.
LECO has a Debt/Equity ratio of 0.88. This is a neutral value indicating 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.
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/WACC2.12
WACC9.54%
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 has a Current ratio of 1.71. This is in the lower half of the industry: LECO underperforms 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.
LECO has a worse Quick ratio (1.07) than 61.36% 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.
LECO shows a small growth in Revenue. In the last year, the Revenue has grown by 3.24%.
Measured over the past years, LECO shows a small growth in Revenue. The Revenue has been growing by 5.94% on average per year.
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.
Based on estimates for the next years, LECO will show a small growth in Revenue. The Revenue will grow by 5.96% on average per year.
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
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 25.75 indicates a quite expensive 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 (27.19), we can say LECO is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 23.02, 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.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.88, LECO is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.75 | ||
| Fwd PE | 23.02 |
4.2 Price Multiples
LECO's Enterprise Value to EBITDA ratio is in line with 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 | 25.41 | ||
| EV/EBITDA | 17.7 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
LECO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.71
PEG (5Y)1.76
EPS Next 2Y8.68%
EPS Next 3Y8.88%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.26%, LECO has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 0.81, LECO pays a bit more dividend than its industry peers.
LECO's Dividend Yield is slightly below the S&P500 average, which is at 1.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
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
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 2Y8.68%
EPS Next 3Y8.88%
252.34
+1.34 (+0.53%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners80.66%
Inst Owner Change0%
Ins Owners1.48%
Ins Owner Change-0.46%
Market Cap13.89B
Revenue(TTM)4.18B
Net Income(TTM)524.74M
Analysts75.56
Price Target266.04 (5.43%)
Short Float %1.36%
Short Ratio2.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
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)-2.56%
EPS NY rev (1m)-0.18%
EPS NY rev (3m)1.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.09%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.75 | ||
| Fwd PE | 23.02 | ||
| P/S | 3.33 | ||
| P/FCF | 25.41 | ||
| P/OCF | 20.98 | ||
| P/B | 9.82 | ||
| P/tB | 26.36 | ||
| EV/EBITDA | 17.7 |
EPS(TTM)9.8
EY3.88%
EPS(NY)10.96
Fwd EY4.34%
FCF(TTM)9.93
FCFY3.94%
OCF(TTM)12.03
OCFY4.77%
SpS75.89
BVpS25.71
TBVpS9.57
PEG (NY)3.71
PEG (5Y)1.76
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
WACC9.54%
ROIC/WACC2.12
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%.