Fact based stock research
Lincoln Electric (NasdaqGS:LECO)

US5339001068

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Lincoln Electric stock research in summary

lincolnelectric.com

ANALYSIS: With an Obermatt Combined Rank of 6 (worse than 94% compared with investment alternatives), Lincoln Electric (Industrial Machinery, USA) shares have lower financial characteristics compared with similar stocks. Shares of Lincoln Electric are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives) and show below-average growth (Growth Rank of 19) but are safely financed (Safety Rank of 51), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 6, is a sell recommendation based on Lincoln Electric's financial characteristics. As the company Lincoln Electric's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 19) and low growth (Obermatt Growth Rank of 19), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 51) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	19
Growth Rank	19
Safety Rank	51
Combined Rank	6

Country	USA
Industry	Industrial Machinery
Index	Dividends USA, Robotics, NASDAQ, S&P MIDCAP
Size class	X-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Lincoln Electric

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	50	43	14	19
GROWTH
GROWTH	51	89	57	19
SAFETY
SAFETY	21	46	44	51
SENTIMENT
SENTIMENT	n/a	100	78	^new
360° VIEW
360° VIEW	n/a	99	49	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Lincoln Electric is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	50	43	14	19
GROWTH
GROWTH	51	89	57	19
SAFETY
SAFETY	21	46	44	51
COMBINED
COMBINED	20	71	26	6

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Lincoln Electric the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), Lincoln Electric shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Lincoln Electric. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 77% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 25 which means that the stock price compared with what market professionals expect for future profits is higher than 75% of comparable companies, indicating a low value concerning Lincoln Electric's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 37 which means that the stock price compared with what market professionals expect for future profit levels is higher than 63% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 1 is also low. Compared with invested capital, the stock price is higher than for 99% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 19, is a sell recommendation based on Lincoln Electric's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Lincoln Electric? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Lincoln Electric only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	53	41	17	25
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	57	56	34	37
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	8	1	1	1
DIVIDEND YIELD
DIVIDEND YIELD	70	77	67	77
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	50	43	14	19

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Lincoln Electric; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), Lincoln Electric shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Lincoln Electric. Sales Growth has a rank of 33, which means that currently professionals expect the company to grow less than 67% of its competitors. The same is valid for Profit Growth, with a rank of 25, and Capital Growth with 13. In addition, Stock Returns have a below market rank of 45, which means that the stock returns have recently been below 55% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	32	54	30	33
PROFIT GROWTH
PROFIT GROWTH	46	72	50	25
CAPITAL GROWTH
CAPITAL GROWTH	n/a	85	55	13
STOCK RETURNS
STOCK RETURNS	66	67	81	45
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	51	89	57	19

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Lincoln Electric.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 51 (better than 51% compared with alternatives), the company Lincoln Electric has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Lincoln Electric is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Lincoln Electric. Liquidity is at 80, meaning the company generates more profit to service its debt than 80% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 24, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 76% of its competitors. Leverage is also high at a rank of 32, which means that the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 51 (better than 51% compared with alternatives), Lincoln Electric has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	30	34	22	32
REFINANCING
REFINANCING	40	14	26	24
LIQUIDITY
LIQUIDITY	42	82	87	80
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	21	46	44	51

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Lincoln Electric and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	54	49	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	79	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	92	53	^new
MARKET PULSE
MARKET PULSE	n/a	90	87	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	100	78	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Lincoln Electric.
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