LINCOLN ELECTRIC HOLDINGS (LECO) Stock Fundamental Analysis
NASDAQ:LECO - US5339001068 - Common Stock
245.25 USD
+7.13 (+2.99%)
245.25 USD
0 (0%)
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.
In the past 5 years LECO has always been profitable.
LECO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
LECO has a Return On Assets of 13.49%. This is amongst the best in the industry. LECO outperforms 90.55% of its industry peers.
LECO has a better Return On Equity (36.45%) than 95.28% of its industry peers.
With an excellent Return On Invested Capital value of 21.01%, LECO belongs to the best of the industry, outperforming 96.85% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for LECO is significantly above the industry average of 10.54%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.49% | ||
| ROE | 36.45% | ||
| ROIC | 21.01% |
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 12.27% is amongst the best of the industry. LECO outperforms 80.31% of its industry peers.
In the last couple of years the Profit Margin of LECO has grown nicely.
Looking at the Operating Margin, with a value of 17.58%, LECO belongs to the top of the industry, outperforming 81.10% of the companies in the same industry.
LECO's Operating Margin has improved in the last couple of years.
LECO has a Gross Margin of 36.51%. This is in the better half of the industry: LECO outperforms 66.14% of its industry peers.
LECO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.58% | ||
| PM (TTM) | 12.27% | ||
| GM | 36.51% |
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.
Compared to 5 years ago, LECO has less shares outstanding
The debt/assets ratio for LECO is higher compared to a year ago.
2.2 Solvency
LECO has an Altman-Z score of 6.93. This indicates that LECO is financially healthy and has little risk of bankruptcy at the moment.
LECO has a Altman-Z score of 6.93. This is amongst the best in the industry. LECO outperforms 87.40% of its industry peers.
The Debt to FCF ratio of LECO is 2.49, which is a good value as it means it would take LECO, 2.49 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of LECO (2.49) is better than 70.08% of its industry peers.
LECO has a Debt/Equity ratio of 0.84. This is a neutral value indicating LECO is somewhat dependend on debt financing.
LECO has a worse Debt to Equity ratio (0.84) than 75.59% 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 | 0.84 | ||
| Debt/FCF | 2.49 | ||
| Altman-Z | 6.93 |
ROIC/WACC2.15
WACC9.76%
2.3 Liquidity
LECO has a Current Ratio of 1.68. 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 (1.68) than 62.99% of its industry peers.
A Quick Ratio of 1.08 indicates that LECO should not have too much problems paying its short term obligations.
LECO's Quick ratio of 1.08 is in line compared to the rest of the industry. LECO outperforms 40.94% of its industry peers.
LECO does not score too well on the current and quick ratio evaluation. However, as it has 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 | 1.68 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
LECO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.53%.
The Earnings Per Share has been growing by 14.62% on average over the past years. This is quite good.
The Revenue has been growing slightly by 0.10% in the past year.
The Revenue has been growing slightly by 5.94% on average over the past years.
EPS 1Y (TTM)0.53%
EPS 3Y14.33%
EPS 5Y14.62%
EPS Q2Q%11.11%
Revenue 1Y (TTM)0.1%
Revenue growth 3Y7.42%
Revenue growth 5Y5.94%
Sales Q2Q%6.56%
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 9.03% yearly.
Based on estimates for the next years, LECO will show a small growth in Revenue. The Revenue will grow by 5.56% on average per year.
EPS Next Y-0.33%
EPS Next 2Y4.75%
EPS Next 3Y5.56%
EPS Next 5Y9.03%
Revenue Next Year2.68%
Revenue Next 2Y3.55%
Revenue Next 3Y3.65%
Revenue Next 5Y5.56%
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.
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
LECO is valuated quite expensively with a Price/Earnings ratio of 25.90.
LECO's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of LECO to the average of the S&P500 Index (27.24), we can say LECO is valued inline with the index average.
A Price/Forward Earnings ratio of 24.08 indicates a rather expensive valuation of LECO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LECO is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 35.82. LECO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.9 | ||
| Fwd PE | 24.08 |
4.2 Price Multiples
LECO's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as LECO.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.12 | ||
| EV/EBITDA | 17.48 |
4.3 Compensation for Growth
The excellent profitability rating of LECO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.77
EPS Next 2Y4.75%
EPS Next 3Y5.56%
5. Dividend
5.1 Amount
LECO has a Yearly Dividend Yield of 1.23%.
LECO's Dividend Yield is a higher than the industry average which is at 1.86.
With a Dividend Yield of 1.23, LECO pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
5.2 History
On average, the dividend of LECO grows each year by 8.56%, which is quite nice.
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
LECO pays out 32.88% of its income as dividend. This is a 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.
DP32.88%
EPS Next 2Y4.75%
EPS Next 3Y5.56%
245.25
+7.13 (+2.99%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners80.45%
Inst Owner Change0%
Ins Owners1.47%
Ins Owner Change1.29%
Market Cap13.69B
Analysts76.47
Price Target248.11 (1.17%)
Short Float %1.58%
Short Ratio2.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
Yearly Dividend2.87
Dividend Growth(5Y)8.56%
DP32.88%
Div Incr Years24
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.55%
Min EPS beat(2)-5.1%
Max EPS beat(2)10.19%
EPS beat(4)3
Avg EPS beat(4)7.98%
Min EPS beat(4)-5.1%
Max EPS beat(4)25.75%
EPS beat(8)7
Avg EPS beat(8)5.97%
EPS beat(12)10
Avg EPS beat(12)4.56%
EPS beat(16)14
Avg EPS beat(16)5.47%
Revenue beat(2)2
Avg Revenue beat(2)1.67%
Min Revenue beat(2)0.82%
Max Revenue beat(2)2.51%
Revenue beat(4)3
Avg Revenue beat(4)0.23%
Min Revenue beat(4)-2.69%
Max Revenue beat(4)2.51%
Revenue beat(8)4
Avg Revenue beat(8)-1.28%
Revenue beat(12)5
Avg Revenue beat(12)-1.45%
Revenue beat(16)8
Avg Revenue beat(16)-0.82%
PT rev (1m)14.67%
PT rev (3m)13.34%
EPS NQ rev (1m)8.25%
EPS NQ rev (3m)5.28%
EPS NY rev (1m)0%
EPS NY rev (3m)0.61%
Revenue NQ rev (1m)5.35%
Revenue NQ rev (3m)6.18%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.6%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.9 | ||
| Fwd PE | 24.08 | ||
| P/S | 3.34 | ||
| P/FCF | 27.12 | ||
| P/OCF | 21.92 | ||
| P/B | 9.92 | ||
| P/tB | 24.89 | ||
| EV/EBITDA | 17.48 |
EPS(TTM)9.47
EY3.86%
EPS(NY)10.18
Fwd EY4.15%
FCF(TTM)9.04
FCFY3.69%
OCF(TTM)11.19
OCFY4.56%
SpS73.42
BVpS24.71
TBVpS9.85
PEG (NY)N/A
PEG (5Y)1.77
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.49% | ||
| ROE | 36.45% | ||
| ROCE | 26.67% | ||
| ROIC | 21.01% | ||
| ROICexc | 23.62% | ||
| ROICexgc | 36.04% | ||
| OM | 17.58% | ||
| PM (TTM) | 12.27% | ||
| GM | 36.51% | ||
| FCFM | 12.32% |
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 Turnover1.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.84 | ||
| Debt/FCF | 2.49 | ||
| Debt/EBITDA | 1.42 | ||
| Cap/Depr | 127.19% | ||
| Cap/Sales | 2.92% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 76.65% | ||
| Profit Quality | 100.41% | ||
| Current Ratio | 1.68 | ||
| Quick Ratio | 1.08 | ||
| Altman-Z | 6.93 |
F-Score6
WACC9.76%
ROIC/WACC2.15
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)0.53%
EPS 3Y14.33%
EPS 5Y14.62%
EPS Q2Q%11.11%
EPS Next Y-0.33%
EPS Next 2Y4.75%
EPS Next 3Y5.56%
EPS Next 5Y9.03%
Revenue 1Y (TTM)0.1%
Revenue growth 3Y7.42%
Revenue growth 5Y5.94%
Sales Q2Q%6.56%
Revenue Next Year2.68%
Revenue Next 2Y3.55%
Revenue Next 3Y3.65%
Revenue Next 5Y5.56%
EBIT growth 1Y1.42%
EBIT growth 3Y12.31%
EBIT growth 5Y11.6%
EBIT Next Year21.94%
EBIT Next 3Y11.35%
EBIT Next 5Y10.21%
FCF growth 1Y3.68%
FCF growth 3Y16.82%
FCF growth 5Y7.65%
OCF growth 1Y10.55%
OCF growth 3Y17.94%
OCF growth 5Y8.24%