Lincoln Electric Holdings (NasdaqGS:LECO) - Share price, News & Analysis

LECO fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	4/6
Financial Health	4/6
Dividends	5/6

LECO Stock Overview

Lincoln Electric Holdings, Inc., through its subsidiaries, designs, develops, manufactures, and sells welding, cutting, and brazing products worldwide.

Rewards

Trading at 39.4% below our estimate of its fair value

Earnings are forecast to grow 7.22% per year

Earnings grew by 46.1% over the past year

Pays a reliable dividend of 1.78%

Risk Analysis

Has a high level of debt

Large one-off items impacting financial results

Lincoln Electric Holdings Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Lincoln Electric Holdings
Historical stock prices
Current Share Price	US$125.78
52 Week High	US$148.55
52 Week Low	US$120.35
Beta	1.15
1 Month Change	-5.74%
3 Month Change	-6.64%
1 Year Change	-4.83%
3 Year Change	52.79%
5 Year Change	36.58%
Change since IPO	1,522.97%

Recent News & Updates

Jun 06

We Think Lincoln Electric Holdings (NASDAQ:LECO) Can Manage Its Debt With Ease

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' When we think about how risky a company...

May 30

Lincoln Electric Holdings: Signs The Situation Is Changing

Lincoln Electric has recently demonstrated some really attractive financial performance on both its top and bottom lines. In the worst case, shares are likely fairly valued, but the changing picture is promising for investors. The company still deserves to be a 'hold' prospect at this time, but continued improvement could change this for the better.

May 25

What Is Lincoln Electric Holdings, Inc.'s (NASDAQ:LECO) Share Price Doing?

Lincoln Electric Holdings, Inc. ( NASDAQ:LECO ), is not the largest company out there, but it saw significant share...

Shareholder Returns

	LECO	US Machinery	US Market
7D	2.8%	1.5%	6.6%
1Y	-4.8%	-20.1%	-18.4%

Return vs Industry: LECO exceeded the US Machinery industry which returned -20.6% over the past year.

Return vs Market: LECO exceeded the US Market which returned -18.5% over the past year.

Price Volatility

Is LECO's price volatile compared to industry and market?
LECO volatility
LECO Average Weekly Movement	3.9%
Machinery Industry Average Movement	6.1%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.6%
10% least volatile stocks in US Market	3.2%

Stable Share Price: LECO is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: LECO's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1895	11,000	Chris Mapes	https://www.lincolnelectric.com

Lincoln Electric Holdings, Inc., through its subsidiaries, designs, develops, manufactures, and sells welding, cutting, and brazing products worldwide. The company operates through three segments: Americas Welding, International Welding, and The Harris Products Group. It offers welding products, including arc welding power sources, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories, and specialty welding consumables and fabrication products.

Lincoln Electric Holdings Fundamentals Summary

How do Lincoln Electric Holdings's earnings and revenue compare to its market cap?
LECO fundamental statistics
Market Cap	US$7.31b
Earnings (TTM)	US$328.32m
Revenue (TTM)	US$3.40b

22.3x

P/E Ratio

2.1x

P/S Ratio

Is LECO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
LECO income statement (TTM)
Revenue	US$3.40b
Cost of Revenue	US$2.25b
Gross Profit	US$1.15b
Other Expenses	US$822.10m
Earnings	US$328.32m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	5.65
Gross Margin	33.81%
Net Profit Margin	9.65%
Debt/Equity Ratio	100.3%

How did LECO perform over the long term?

See historical performance and comparison

Dividends

1.8%

Current Dividend Yield

38%

Payout Ratio

Does LECO pay a reliable dividends?

See LECO dividend history and benchmarks

When do you need to buy LECO by to receive an upcoming dividend?
Lincoln Electric Holdings dividend dates
Ex Dividend Date	Jun 29 2022
Dividend Pay Date	Jul 15 2022
Days until Ex dividend	2 days
Days until Dividend pay date	18 days

Does LECO pay a reliable dividends?

See LECO dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is LECO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LECO?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for LECO. This is calculated by dividing LECO's market cap by their current preferred multiple.
What is LECO's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$7.31b

LECO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.4x
Enterprise Value/EBITDA	13.3x
PEG Ratio	3.1x

Price to Earnings Ratio vs Peers

How does LECO's PE Ratio compare to its peers?

LECO PE Ratio vs Peers

The above table shows the PE ratio for LECO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	45.6x

Forward PE

Price-To-Earnings vs Peers: LECO is good value based on its Price-To-Earnings Ratio (22.3x) compared to the peer average (45.6x).

Price to Earnings Ratio vs Industry

How does LECO's PE Ratio compare vs other companies in the U.S. Machinery Industry?

Price-To-Earnings vs Industry: LECO is expensive based on its Price-To-Earnings Ratio (22.3x) compared to the US Machinery industry average (21.7x)

Price to Earnings Ratio vs Fair Ratio

What is LECO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LECO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	22.3x
Fair PE Ratio	17.5x

Price-To-Earnings vs Fair Ratio: LECO is expensive based on its Price-To-Earnings Ratio (22.3x) compared to the estimated Fair Price-To-Earnings Ratio (17.5x).

Share Price vs Fair Value

What is the Fair Price of LECO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LECO ($125.78) is trading below our estimate of fair value ($207.56)

Significantly Below Fair Value: LECO is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: LECO is poor value based on its PEG Ratio (3.1x)

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Future Growth

How is Lincoln Electric Holdings forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

7.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LECO's forecast earnings growth (7.2% per year) is above the savings rate (1.9%).

Earnings vs Market: LECO's earnings (7.2% per year) are forecast to grow slower than the US market (14% per year).

High Growth Earnings: LECO's earnings are forecast to grow, but not significantly.

Revenue vs Market: LECO's revenue (4.6% per year) is forecast to grow slower than the US market (8.4% per year).

High Growth Revenue: LECO's revenue (4.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: LECO's Return on Equity is forecast to be high in 3 years time (39.2%)

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Past Performance

How has Lincoln Electric Holdings performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

2.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LECO has a large one-off loss of $132.0M impacting its March 31 2022 financial results.

Growing Profit Margin: LECO's current net profit margins (9.6%) are higher than last year (8.3%).

Past Earnings Growth Analysis

Earnings Trend: LECO's earnings have grown by 2.3% per year over the past 5 years.

Accelerating Growth: LECO's earnings growth over the past year (46.1%) exceeds its 5-year average (2.3% per year).

Earnings vs Industry: LECO earnings growth over the past year (46.1%) exceeded the Machinery industry 24%.

Return on Equity

High ROE: Whilst LECO's Return on Equity (38.06%) is high, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is Lincoln Electric Holdings's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: LECO's short term assets ($1.4B) exceed its short term liabilities ($927.7M).

Long Term Liabilities: LECO's short term assets ($1.4B) exceed its long term liabilities ($945.6M).

Debt to Equity History and Analysis

Debt Level: LECO's net debt to equity ratio (82.4%) is considered high.

Reducing Debt: LECO's debt to equity ratio has increased from 90.6% to 100.3% over the past 5 years.

Debt Coverage: LECO's debt is well covered by operating cash flow (41.9%).

Interest Coverage: LECO's interest payments on its debt are well covered by EBIT (22.7x coverage).

Balance Sheet

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Dividend

What is Lincoln Electric Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.78%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: LECO's dividend (1.78%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: LECO's dividend (1.78%) is low compared to the top 25% of dividend payers in the US market (4.24%).

Stability and Growth of Payments

Stable Dividend: LECO's dividends per share have been stable in the past 10 years.

Growing Dividend: LECO's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (38.5%), LECO's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (44.6%), LECO's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

5.9yrs

Average management tenure

CEO

Chris Mapes (59 yo)

9.5yrs

Tenure

US$9,213,820

Compensation

Mr. Christopher L. Mapes, also known as Chris, has been the Chief Executive Officer and President of Lincoln Electric Holdings, Inc. (formerly, The Lincoln Electric Company) since December 31, 2012 and has...

CEO Compensation Analysis

Compensation vs Market: Chris's total compensation ($USD9.21M) is about average for companies of similar size in the US market ($USD8.44M).

Compensation vs Earnings: Chris's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: LECO's management team is seasoned and experienced (5.9 years average tenure).

Board Members

Experienced Board: LECO's board of directors are considered experienced (7.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/26 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31