Lincoln Electric (NASDAQ:LECO – Get Free Report) is one of 434 public companies in the “Machinery” industry, but how does it compare to its competitors? We will compare Lincoln Electric to related businesses based on the strength of its risk, institutional ownership, valuation, dividends, profitability, analyst recommendations and earnings.
Dividends
Lincoln Electric pays an annual dividend of $3.16 per share and has a dividend yield of 1.2%. 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 2.5% and pay out 27.3% of their earnings in the form of a dividend. Lincoln Electric has raised its dividend for 30 consecutive years. Lincoln Electric lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.
Institutional & Insider 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, 13.9% of shares of all “Machinery” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Earnings and Valuation
| Gross Revenue | Net Income | Price/Earnings Ratio | |
| Lincoln Electric | $4.23 billion | $520.53 million | 27.23 |
| Lincoln Electric Competitors | $4.50 billion | $346.86 million | -27.29 |
Lincoln Electric’s competitors have higher revenue, but lower earnings than Lincoln Electric. Lincoln Electric is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.
Analyst Recommendations
This is a breakdown of recent ratings for Lincoln Electric and its competitors, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lincoln Electric | 0 | 4 | 5 | 1 | 2.70 |
| Lincoln Electric Competitors | 4080 | 14476 | 17893 | 777 | 2.41 |
Lincoln Electric presently has a consensus target price of $307.22, suggesting a potential upside of 12.70%. As a group, “Machinery” companies have a potential upside of 33.57%. Given Lincoln Electric’s competitors higher possible upside, analysts clearly believe Lincoln Electric has less favorable growth aspects than its competitors.
Profitability
This table compares Lincoln Electric and its competitors’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lincoln Electric | 12.35% | 39.23% | 15.25% |
| Lincoln Electric Competitors | -1,946.96% | -10.16% | 0.86% |
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, Lincoln Electric’s competitors have a beta of 4.53, meaning that their average share price is 353% more volatile than the S&P 500.
Summary
Lincoln Electric beats its competitors on 9 of the 15 factors compared.
About Lincoln Electric
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.
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