Lincoln Electric Holdings Inc

LECO

Metalworkg Machinery & Equipment

Mkt Cap

$11.34B

PE

20.74

Debt

$1.103B

Cash

$375M

EV

$12.07B

FCF

$578.4M

Market Cap

$11.34B

P/E Ratio

20.74

Debt

$1.103B

Cash

$375M

EV

$12.07B

FCF

$578.4M

Charts data: {"Earnings":[{"time":"2014-12-30","value":253880000},{"time":"2015-12-30","value":127412000},{"time":"2016-12-30","value":198373000},{"time":"2017-12-30","value":247475000},{"time":"2018-12-30","value":286993000},{"time":"2019-12-30","value":293083000},{"time":"2020-12-30","value":206115000},{"time":"2021-12-30","value":276466000},{"time":"2022-12-30","value":472224000},{"time":"2023-12-30","value":545248000}],"Sales":[{"time":"2014-12-30","value":2813324000},{"time":"2015-12-30","value":2535791000},{"time":"2016-12-30","value":2274614000},{"time":"2017-12-30","value":2624431000},{"time":"2018-12-30","value":3028674000},{"time":"2019-12-30","value":3003272000},{"time":"2020-12-30","value":2655400000},{"time":"2021-12-30","value":3234180000},{"time":"2022-12-30","value":3761211000},{"time":"2023-12-30","value":4191636000}],"Net Margins":[{"time":"2014-12-30","value":0.09024200554219848},{"time":"2015-12-30","value":0.05024546581323145},{"time":"2016-12-30","value":0.08721172031826059},{"time":"2017-12-30","value":0.09429663039340717},{"time":"2018-12-30","value":0.09475863034450059},{"time":"2019-12-30","value":0.09758789746649654},{"time":"2020-12-30","value":0.07762107403780974},{"time":"2021-12-30","value":0.08548256435943577},{"time":"2022-12-30","value":0.12555105257322707},{"time":"2023-12-30","value":0.13007999740435477}],"Assets":[{"time":"2014-12-30","value":1939215000},{"time":"2015-12-30","value":1784171000},{"time":"2016-12-30","value":1943437000},{"time":"2017-12-30","value":2406547000},{"time":"2018-12-30","value":2349825000},{"time":"2019-12-30","value":2371213000},{"time":"2020-12-30","value":2314453000},{"time":"2021-12-30","value":2592307000},{"time":"2022-12-30","value":3180546000},{"time":"2023-12-30","value":3377297000}],"Stockholders Equity":[{"time":"2014-12-30","value":1285781000},{"time":"2015-12-30","value":932448000},{"time":"2016-12-30","value":712206000},{"time":"2017-12-30","value":932453000},{"time":"2018-12-30","value":887592000},{"time":"2019-12-30","value":819077000},{"time":"2020-12-30","value":790250000},{"time":"2021-12-30","value":864102000},{"time":"2022-12-30","value":1034140000},{"time":"2023-12-30","value":1308852000}],"ROE":[{"time":"2014-12-30","value":0.1974519766585445},{"time":"2015-12-30","value":0.1366424722879989},{"time":"2016-12-30","value":0.27853317719873183},{"time":"2017-12-30","value":0.2654021167822936},{"time":"2018-12-30","value":0.3233388764206978},{"time":"2019-12-30","value":0.3578210595585031},{"time":"2020-12-30","value":0.2608225245175577},{"time":"2021-12-30","value":0.31994602489058005},{"time":"2022-12-30","value":0.4566344982304137},{"time":"2023-12-30","value":0.4165849156359925}],"ROA":[{"time":"2014-12-30","value":0.193796458876401},{"time":"2015-12-30","value":0.10184001421388421},{"time":"2016-12-30","value":0.14833205295566565},{"time":"2017-12-30","value":0.15695143290365823},{"time":"2018-12-30","value":0.15981573095868842},{"time":"2019-12-30","value":0.15642205065508666},{"time":"2020-12-30","value":0.1218737213501419},{"time":"2021-12-30","value":0.17809194667143977},{"time":"2022-12-30","value":0.19252543431222185},{"time":"2023-12-30","value":0.21255133913304042}]}

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, as well as consumables used in the brazing and soldering alloys market. In addition, it is involved in the retail business in the United States. Further, 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. The company serves general fabrication, energy and 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.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
10-Q
9/30/22
10-Q
6/30/22
10-Q
3/31/22
10-K
12/31/21
10-Q
9/30/21
10-Q
6/30/21
10-Q
3/31/21
10-K
12/31/20
10-Q
9/30/20
10-Q
6/30/20
10-Q
3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Lincoln Electric Holdings Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$578.4M	$615.1M	$653.1M	$692.6M	$733.3M	$775.4M	$818.8M	$863.4M	$909.1M	$955.9M	$1.004B	$10.04B
DCF		$534.9M	$493.9M	$455.4M	$419.3M	$385.5M	$354M	$324.6M	$297.2M	$271.7M	$248.1M	$2.481B
Value	$6.266B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 14%

Earnings Stability 64%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	5%	8.7%	9.4%	9.5%	9.8%	7.8%	8.5%	13%	13%	13%
ROA	10%	15%	16%	16%	16%	12%	18%	19%	21%	21%
ROE	14%	28%	27%	32%	36%	26%	32%	46%	42%	42%

What is the average Net Margin?

The average Net Margin over the past 5 years is +10.18%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.77%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +17.02%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.22%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +35.59%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +2.35%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	1.37	2.78	2.59	2.72	2.24	2.46	2.55	3.90	1.92	1.91
Debt Equity	0.38	0.99	0.76	0.79	0.91	0.91	0.89	1.17	0.84	0.84
MIN
Graham Stability	-	-	100%	100%	100%	75%	100%	100%	100%	75%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 1.91.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 0.03.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.75.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	9.1%	6.7%	16%	11%	2.5%
Net Income	16%	14%	38%	15%	4.7%
Stockholders Equity	9.1%	8.1%	18%	27%	5.1%
FCF	12%	17%	25%	85%	7.1%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +6.72%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +2.51%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +13.7%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +4.66%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +8.08%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +5.07%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +17.46%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +7.08%.