Lincoln Electric (LECO) vs. Its Peers Financial Analysis

Lincoln Electric (NASDAQ:LECO – Get Free Report) is one of 434 publicly-traded companies in the “Machinery” industry, but how does it weigh in compared to its peers? We will compare Lincoln Electric to related businesses based on the strength of its dividends, earnings, valuation, analyst recommendations, profitability, institutional ownership and risk.

Dividends

Lincoln Electric pays an annual dividend of $3.16 per share and has a dividend yield of 1.1%. Lincoln Electric pays out 31.6% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.7% and pay out 27.4% of their earnings in the form of a dividend. Lincoln Electric has increased its dividend for 30 consecutive years. Lincoln Electric lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Insider and Institutional Ownership

79.6% of Lincoln Electric shares are held by institutional investors. Comparatively, 52.2% of shares of all “Machinery” companies are held by institutional investors. 1.7% of Lincoln Electric shares are held by insiders. Comparatively, 14.0% of shares of all “Machinery” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Lincoln Electric and its peers revenue, earnings per share and valuation.

Lincoln Electric’s peers have higher revenue, but lower earnings than Lincoln Electric. Lincoln Electric is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of current recommendations and price targets for Lincoln Electric and its peers, as provided by MarketBeat.com.

Lincoln Electric presently has a consensus target price of $307.22, indicating a potential upside of 10.89%. As a group, “Machinery” companies have a potential upside of 30.03%. Given Lincoln Electric’s peers higher possible upside, analysts plainly believe Lincoln Electric has less favorable growth aspects than its peers.

Risk and Volatility

Lincoln Electric has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, Lincoln Electric’s peers have a beta of 4.53, indicating that their average share price is 353% more volatile than the S&P 500.

Profitability

This table compares Lincoln Electric and its peers’ net margins, return on equity and return on assets.

Summary

Lincoln Electric beats its peers on 9 of the 15 factors compared.

Lincoln Electric Company Profile

(Get Free Report)

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 brazing and soldering filler metals, arc welding equipment, plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, and specialty gas regulators, and education solutions, as well as a portfolio of automated solutions for joining, cutting, material handling, module assembly, and end of line testing, as well as involved in brazing and soldering alloys, and in the retail business in the United States. In addition, the company manufactures copper and aluminum headers, distributor assemblies, and manifolds for the heating, ventilation, and air conditioning sector in the United States and Mexico; provides specialty welding consumables, wear plates and maintenance and repair services for alloy and wear-resistant products used in mining, steel, agricultural, and industrial mill applications; and designs and manufactures robotic assembly and arc welding systems that automate the tacking and welding of steel beams. Further, the company serves general fabrication, oil and gas, power generation, process, automotive and transportation, and construction and infrastructure industries, as well as heavy fabrication, ship building, and maintenance and repair markets. It sells its products directly to users of welding products, as well as through industrial distributors, retailers, and agents. The company was founded in 1895 and is headquartered in Cleveland, Ohio.