Head to Head Analysis: Terex (NYSE:TEX) versus Lincoln Electric (NASDAQ:LECO)

Lincoln Electric (NASDAQ:LECO – Get Free Report) and Terex (NYSE:TEX – Get Free Report) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Insider and Institutional Ownership

79.6% of Lincoln Electric shares are owned by institutional investors. Comparatively, 92.9% of Terex shares are owned by institutional investors. 1.7% of Lincoln Electric shares are owned by insiders. Comparatively, 1.6% of Terex shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Lincoln Electric pays an annual dividend of $3.48 per share and has a dividend yield of 1.4%. Terex pays an annual dividend of $0.68 per share and has a dividend yield of 1.3%. Lincoln Electric pays out 34.8% of its earnings in the form of a dividend. Terex pays out 34.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lincoln Electric has raised its dividend for 30 consecutive years and Terex has raised its dividend for 5 consecutive years. Lincoln Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Lincoln Electric and Terex’s net margins, return on equity and return on assets.

Earnings and Valuation

This table compares Lincoln Electric and Terex”s revenue, earnings per share (EPS) and valuation.

Lincoln Electric has higher earnings, but lower revenue than Terex. Lincoln Electric is trading at a lower price-to-earnings ratio than Terex, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Lincoln Electric has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, Terex has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Lincoln Electric and Terex, as provided by MarketBeat.com.

Lincoln Electric currently has a consensus target price of $306.78, indicating a potential upside of 19.85%. Terex has a consensus target price of $75.64, indicating a potential upside of 47.49%. Given Terex’s stronger consensus rating and higher probable upside, analysts plainly believe Terex is more favorable than Lincoln Electric.

Summary

Lincoln Electric beats Terex on 9 of the 17 factors compared between the two stocks.

About Lincoln Electric

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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.

About Terex

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Terex Corporation manufactures and sells aerial work platforms and materials processing machinery worldwide. It operates in two segments, Materials Processing (MP) and Aerial Work Platforms (AWP). The MP segment designs, manufactures, services, and markets materials processing and specialty equipment, includes crushers, washing systems, screens, trommels, apron feeders, material handlers, pick and carry cranes, rough terrain cranes, tower cranes, wood processing, biomass and recycling equipment, concrete mixer trucks and concrete pavers, conveyors, and related components and replacement parts under the Terex, Powerscreen, Fuchs, EvoQuip, Canica, Cedarapids, CBI, Simplicity, Franna, Terex Ecotec, Finlay, ProAll, ZenRobotics, Terex Washing Systems, Terex MPS, Terex Jaques, Terex Advance, ProStack, Terex Bid-Well, MDS, and Terex Recycling Systems brands. Its products are used in construction, infrastructure, and recycling projects; quarrying and mining, and material handling applications; maintenance applications to lift equipment or material; and landscaping and biomass production industries. The AWP segment designs, manufactures, services, and markets aerial work platform equipment, utility equipment, and telehandlers under the Terex and Genie brands. Its products include portable material lifts, portable aerial work platforms, trailer-mounted articulating booms, self-propelled articulating and telescopic booms, and scissor lifts, as well as related components and replacement parts for construction and maintenance of industrial, commercial, institutional, and residential buildings and facilities, transmission and distribution lines, construction and foundation drilling applications, and other commercial operations, as well as in tree trimming and various infrastructure projects. The company offers financing solutions to assist customers in the rental, leasing, and acquisition of its products. Terex Corporation was founded in 1933 and is based in Norwalk, Connecticut.