LINCOLN ELECTRIC HOLDINGS (LECO) Stock Fundamental Analysis
USA - NASDAQ:LECO - US5339001068 - Common Stock
228.37 USD
+3.3 (+1.47%)
228.37 USD
0 (0%)
Overall LECO gets a fundamental rating of 6 out of 10. We evaluated LECO against 130 industry peers in the Machinery industry. Both the health and profitability get an excellent rating, making LECO a very profitable company, without any liquidiy or solvency issues. LECO is valied quite expensively at the moment, while 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.
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
LECO's Return On Assets of 13.75% is amongst the best of the industry. LECO outperforms 92.31% of its industry peers.
LECO's Return On Equity of 37.09% is amongst the best of the industry. LECO outperforms 95.38% of its industry peers.
LECO's Return On Invested Capital of 20.19% is amongst the best of the industry. LECO outperforms 96.15% of its industry peers.
The Average Return On Invested Capital over the past 3 years for LECO is significantly above the industry average of 10.24%.
| 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
The Profit Margin of LECO (12.56%) is better than 83.08% of its industry peers.
In the last couple of years the Profit Margin of LECO has grown nicely.
The Operating Margin of LECO (17.54%) is better than 81.54% 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 66.92% of its industry peers.
LECO's Gross Margin has improved in the last couple of years.
| 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
An Altman-Z score of 6.62 indicates that LECO is not in any danger for bankruptcy at the moment.
LECO's Altman-Z score of 6.62 is amongst the best of the industry. LECO outperforms 87.69% of its industry peers.
The Debt to FCF ratio of LECO is 2.27, which is a good value as it means it would take LECO, 2.27 years of fcf income to pay off all of its debts.
LECO's Debt to FCF ratio of 2.27 is fine compared to the rest of the industry. LECO outperforms 72.31% of its industry peers.
A Debt/Equity ratio of 0.88 indicates that LECO is somewhat dependend on debt financing.
The Debt to Equity ratio of LECO (0.88) is worse than 75.38% 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 | 0.88 | ||
| Debt/FCF | 2.27 | ||
| Altman-Z | 6.62 |
ROIC/WACC2.15
WACC9.37%
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 worse Current ratio (1.71) than 62.31% 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 Quick ratio of 1.07. This is comparable to the rest of the industry: LECO outperforms 40.77% 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 | 1.71 | ||
| 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%.
LECO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.62% yearly.
The Revenue has been growing slightly by 3.24% in the past year.
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
The Earnings Per Share is expected to grow by 9.54% on average over the next years. This is quite good.
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 Y7.08%
EPS Next 2Y8.75%
EPS Next 3Y8.96%
EPS Next 5Y9.54%
Revenue Next Year6.35%
Revenue Next 2Y6.1%
Revenue Next 3Y5.77%
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
Based on the Price/Earnings ratio of 23.30, the valuation of LECO can be described as rather expensive.
The rest of the industry has a similar Price/Earnings ratio as LECO.
The average S&P500 Price/Earnings ratio is at 26.13. LECO is around the same levels.
Based on the Price/Forward Earnings ratio of 20.81, 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.
LECO is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.35, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.3 | ||
| Fwd PE | 20.81 |
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 60.77% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.06 | ||
| EV/EBITDA | 16.02 |
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)3.29
PEG (5Y)1.59
EPS Next 2Y8.75%
EPS Next 3Y8.96%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.40%, LECO has a reasonable but not impressive dividend return.
LECO's Dividend Yield is a higher than the industry average which is at 1.83.
Compared to an average S&P500 Dividend Yield of 2.39, LECO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
5.2 History
On average, the dividend of LECO grows each year by 8.56%, 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)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 2Y8.75%
EPS Next 3Y8.96%
228.37
+3.3 (+1.47%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners81.51%
Inst Owner Change-1.67%
Ins Owners1.48%
Ins Owner Change-0.83%
Market Cap12.60B
Revenue(TTM)4.18B
Net Income(TTM)524.74M
Analysts76.67
Price Target263.18 (15.24%)
Short Float %1.86%
Short Ratio3.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
Yearly Dividend2.87
Dividend Growth(5Y)8.56%
DP31.76%
Div Incr Years24
Div Non Decr Years24
Ex-Date
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)1.1%
PT rev (3m)19.38%
EPS NQ rev (1m)0.53%
EPS NQ rev (3m)7.37%
EPS NY rev (1m)0.95%
EPS NY rev (3m)7.23%
Revenue NQ rev (1m)0.19%
Revenue NQ rev (3m)3.88%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)2.88%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.3 | ||
| Fwd PE | 20.81 | ||
| P/S | 3.02 | ||
| P/FCF | 23.06 | ||
| P/OCF | 19.04 | ||
| P/B | 8.91 | ||
| P/tB | 23.93 | ||
| EV/EBITDA | 16.02 |
EPS(TTM)9.8
EY4.29%
EPS(NY)10.98
Fwd EY4.81%
FCF(TTM)9.9
FCFY4.34%
OCF(TTM)12
OCFY5.25%
SpS75.67
BVpS25.63
TBVpS9.54
PEG (NY)3.29
PEG (5Y)1.59
Graham Number75.18
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 | 6.62 |
F-Score7
WACC9.37%
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)6.99%
EPS 3Y14.33%
EPS 5Y14.62%
EPS Q2Q%15.42%
EPS Next Y7.08%
EPS Next 2Y8.75%
EPS Next 3Y8.96%
EPS Next 5Y9.54%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y7.42%
Revenue growth 5Y5.94%
Sales Q2Q%7.87%
Revenue Next Year6.35%
Revenue Next 2Y6.1%
Revenue Next 3Y5.77%
Revenue Next 5Y5.96%
EBIT growth 1Y3.45%
EBIT growth 3Y12.31%
EBIT growth 5Y11.6%
EBIT Next Year22.32%
EBIT Next 3Y11.48%
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.
Can you provide the valuation status for LINCOLN ELECTRIC HOLDINGS?
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.
Can you provide the financial health for LECO stock?
The financial health rating of LINCOLN ELECTRIC HOLDINGS (LECO) is 7 / 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 7.08% in the next year.