Lincoln Electric Holdings Inc. Common Shares (LECO)

FairStock Score: 55/100 — STEADY

Key Financials

Strengths

• Generates $281 million in annual free cash flow (1.9% yield on market cap)
• High return on equity of 37.2% demonstrating efficient capital deployment
• Altman Z-Score of 6.1 confirms minimal bankruptcy risk and strong solvency
• Established organization with 12,000 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($75) with negative 253% margin of safety—limited downside protection

AI Analysis

Lincoln Electric Holdings Inc. Common Shares is a mid-cap industrials company valued at $14.5 billion. The business generates $4.2 billion in annual revenue with a 3.2% net margin and $281 million in free cash flow. From a quality standpoint, Lincoln shows solid Piotroski F-Score of 6/9 and Altman Z-Score of 6.1 confirms fortress-level solvency. On valuation, the stock is trading at a premium 28.3x earnings, with trades far above its Graham Number ($75) with no margin of safety. Growth dynamics show revenue growing at 5.5% and profit growth of -3.0%. The 1.2% dividend yield adds an income component for patient holders. Our composite FairStock Score of 55/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $281 million in annual free cash flow (1.9% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the industrials space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer