Lincoln Electric Price To Book vs. Return On Equity

LECO Stock  USD 218.48  1.86  0.86%   
Based on the measurements of profitability obtained from Lincoln Electric's financial statements, Lincoln Electric Holdings is yielding more profit at this time then in previous quarter. It has a moderate probability of reporting better profitability numbers in December. Profitability indicators assess Lincoln Electric's ability to earn profits and add value for shareholders. At this time, Lincoln Electric's Price To Sales Ratio is very stable compared to the past year. As of the 29th of November 2024, Days Sales Outstanding is likely to grow to 56.50, while Sales General And Administrative To Revenue is likely to drop 0.23. At this time, Lincoln Electric's Income Quality is very stable compared to the past year.
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.360.3523
Fairly Up
Pretty Stable
Net Profit Margin0.140.1301
Significantly Up
Slightly volatile
Operating Profit Margin0.0880.1713
Way Down
Pretty Stable
Pretax Profit Margin0.0880.1639
Way Down
Pretty Stable
Return On Assets0.170.1614
Notably Up
Slightly volatile
Return On Equity0.440.4166
Notably Up
Slightly volatile
For Lincoln Electric profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Lincoln Electric to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Lincoln Electric Holdings utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Lincoln Electric's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Lincoln Electric Holdings over time as well as its relative position and ranking within its peers.
  

Lincoln Electric's Revenue Breakdown by Earning Segment

Check out Correlation Analysis.
Is Industrial Machinery & Supplies & Components space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Lincoln Electric. If investors know Lincoln will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Lincoln Electric listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.20)
Dividend Share
2.84
Earnings Share
8.38
Revenue Per Share
71.184
Quarterly Revenue Growth
(0.05)
The market value of Lincoln Electric Holdings is measured differently than its book value, which is the value of Lincoln that is recorded on the company's balance sheet. Investors also form their own opinion of Lincoln Electric's value that differs from its market value or its book value, called intrinsic value, which is Lincoln Electric's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Lincoln Electric's market value can be influenced by many factors that don't directly affect Lincoln Electric's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Lincoln Electric's value and its price as these two are different measures arrived at by different means. Investors typically determine if Lincoln Electric is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Lincoln Electric's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Lincoln Electric Holdings Return On Equity vs. Price To Book Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Lincoln Electric's current stock value. Our valuation model uses many indicators to compare Lincoln Electric value to that of its competitors to determine the firm's financial worth.
Lincoln Electric Holdings is currently regarded as number one stock in price to book category among its peers. It also is currently regarded as number one stock in return on equity category among its peers reporting about  0.04  of Return On Equity per Price To Book. The ratio of Price To Book to Return On Equity for Lincoln Electric Holdings is roughly  24.25 . At this time, Lincoln Electric's Return On Equity is very stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Lincoln Electric's earnings, one of the primary drivers of an investment's value.

Lincoln Return On Equity vs. Price To Book

Price to Book (P/B) ratio is used to relate a company book value to its current market price. A high P/B ratio indicates that investors expect executives to generate more returns on their investments from a given set of assets. Book value is the accounting value of assets minus liabilities.

Lincoln Electric

P/B

 = 

MV Per Share

BV Per Share

 = 
9.13 X
Price to Book ratio is mostly used in financial services industries where assets and liabilities are typically represented by dollars. Although low Price to Book ratio generally implies that the firm is undervalued, it is often a good indicator that the company may be in financial or managerial distress and should be investigated more carefully.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Lincoln Electric

Return On Equity

 = 

Net Income

Total Equity

 = 
0.38
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.

Lincoln Return On Equity Comparison

Lincoln Electric is currently under evaluation in return on equity category among its peers.

Lincoln Electric Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Lincoln Electric, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Lincoln Electric will eventually generate negative long term returns. The profitability progress is the general direction of Lincoln Electric's change in net profit over the period of time. It can combine multiple indicators of Lincoln Electric, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-229.8 M-241.3 M
Operating Income717.8 M753.7 M
Income Before Tax686.9 M721.2 M
Total Other Income Expense Net-31 M-29.4 M
Net Income545.2 M572.5 M
Income Tax Expense141.6 M72 M
Net Income Applicable To Common Shares543.1 M570.2 M
Net Income From Continuing Ops545.2 M307.8 M
Non Operating Income Net OtherM9.4 M
Interest Income23.3 M12.2 M
Net Interest Income-44.4 M-42.2 M
Change To Netincome-12.6 M-12 M
Net Income Per Share 9.51  9.98 
Income Quality 1.22  1.63 
Net Income Per E B T 0.79  0.56 

Lincoln Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Lincoln Electric. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Lincoln Electric position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Lincoln Electric's important profitability drivers and their relationship over time.

Use Lincoln Electric in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Lincoln Electric position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lincoln Electric will appreciate offsetting losses from the drop in the long position's value.

Lincoln Electric Pair Trading

Lincoln Electric Holdings Pair Trading Analysis

The ability to find closely correlated positions to Lincoln Electric could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Lincoln Electric when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Lincoln Electric - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Lincoln Electric Holdings to buy it.
The correlation of Lincoln Electric is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Lincoln Electric moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Lincoln Electric Holdings moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Lincoln Electric can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Lincoln Electric position

In addition to having Lincoln Electric in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Baby Boomer Prospects
Baby Boomer Prospects Theme
Equities with large market capitalization that account for significant contribution to overall economic growth especially within dividend-paying instruments and stocks from healthcare and financial sectors. The Baby Boomer Prospects theme has 98 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Baby Boomer Prospects Theme or any other thematic opportunities.
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When determining whether Lincoln Electric Holdings offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Lincoln Electric's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Lincoln Electric Holdings Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Lincoln Electric Holdings Stock:
Check out Correlation Analysis.
You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
To fully project Lincoln Electric's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Lincoln Electric Holdings at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Lincoln Electric's income statement, its balance sheet, and the statement of cash flows.
Potential Lincoln Electric investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Lincoln Electric investors may work on each financial statement separately, they are all related. The changes in Lincoln Electric's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Lincoln Electric's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.