Updated 5/28/25
Lincoln Electric Holdings (LECO) is a global leader in welding equipment and automation solutions, supported by over a century of manufacturing expertise and a deeply rooted presence in industrial sectors. With a market cap near \$11 billion and consistent cash flow generation, the company has maintained a near-30-year streak of dividend increases, underpinned by a 36% payout ratio and strong free cash flow. Its management team, led by CEO Steven Hedlund, has remained focused on disciplined growth, operational efficiency, and strategic acquisitions.
The stock is currently trading around \$193, with a forward P/E of 21.4 and a PEG ratio of 1.54, reflecting a valuation that balances stability and expected growth. Analysts maintain a moderate buy consensus, targeting a 12-month average price of \$206. The company’s first-quarter results showed resilient margins and record operating cash flow of \$186 million, even as organic volumes softened. Leadership has signaled continued pricing action to navigate tariffs, while its global footprint and technology investments help position it for long-term performance.
Recent Events
In its most recent quarter, Lincoln Electric delivered results that were solid, though not particularly flashy. Total revenue over the past year hit $4.03 billion, with year-over-year growth of 2.4%. That’s steady, even if not spectacular. Earnings came in at $8.11 per share, though there was a slight dip in year-over-year EPS growth. It’s not necessarily a red flag, but it does hint at some cost pressures or shifting demand in key markets.
The stock price has pulled back a bit recently, moving down from a 52-week high of $222 to trade closer to the $193 range. It also touched a low of $161 within the same period, showing a bit of volatility—something not uncommon in the industrial sector. For dividend investors, this kind of dip can actually create more attractive entry points, boosting forward yield and giving a bit of margin of safety.
Looking at the company’s financials, there’s a lot to like. Lincoln Electric maintains a current ratio of 1.78, keeping liquidity in check. Debt is present—just over $1.3 billion—but not overwhelming when viewed alongside $395 million in cash and a strong cash flow profile. The debt-to-equity ratio is near 98%, which is a little high, but manageable given their ability to convert revenue into free cash flow.
Key Dividend Metrics
📈 Forward Yield: 1.53%
📉 5-Year Average Yield: 1.54%
💵 Annual Dividend: $3.00
📊 Payout Ratio: 36%
🔁 Dividend Growth Streak: 29 years
📅 Next Dividend Date: Ex-div on June 30, Payable July 15
💰 Free Cash Flow Coverage: Strong, with $480M in levered FCF
🛡️ Safety Profile: Supported by robust FCF, reasonable payout ratio
Dividend Overview
Let’s be real: at first glance, a 1.5% dividend yield isn’t going to blow anyone away. But for serious dividend investors, the yield is only part of the story. What makes Lincoln Electric stand out is the consistency and strength behind that dividend.
The company has been raising its dividend for 29 straight years. That kind of track record doesn’t happen by accident. It reflects a management team that understands capital allocation and a business model that’s resilient through economic cycles. The current annual payout of $3.00 is well supported by cash flows. With a payout ratio of just 36%, there’s more than enough flexibility to continue growing the dividend even if earnings flatten for a period.
Next dividend payment is coming mid-July, with shares going ex-dividend on June 30. If you’re holding the stock before that date, you’ll be collecting.
It’s also worth noting that this is a dividend you can actually count on. Free cash flow over the trailing twelve months was nearly half a billion dollars. That means the dividend isn’t funded with borrowed money or hopeful projections—it’s covered with real, operating cash.
Dividend Growth and Safety
Lincoln Electric isn’t just paying dividends; they’re growing them. Over the past decade, dividend increases have come in at a healthy clip. Not aggressive, but steady—typically in the high single digits. For an industrial company, that’s quite respectable.
What really gives confidence in this payout is the foundation behind it. The company is efficient. Operating margins are over 16%, and return on equity is close to 35%. That’s not a typo—35%. Even with some leverage in the mix, those numbers suggest a business that knows how to generate returns.
Their forward price-to-earnings ratio is in the low 20s. That might look a little rich for a traditional industrial name, but it reflects the quality of the company. The PEG ratio is around 1.5, which suggests you’re not overpaying for growth. And with a price-to-book ratio north of 8, investors are clearly valuing the intangible strength of the brand and consistent earnings power.
Perhaps the most underappreciated metric here is free cash flow yield. Lincoln Electric converts a high percentage of earnings into free cash. With $651 million in operating cash flow and relatively modest capex, that means they’ve got plenty of room to pay, raise, and protect that dividend going forward.
For those who value stability, consistency, and a little dividend growth year after year, Lincoln Electric checks a lot of boxes. It’s not loud. It’s not trendy. But it’s durable—and that’s what income investors are really after.
Cash Flow Statement
Lincoln Electric reported strong cash generation over the trailing twelve months, with operating cash flow reaching $651 million. This level of cash flow provides a solid foundation for both ongoing operations and shareholder returns. The company’s free cash flow—cash left after capital expenditures—came in at $480 million, indicating efficient reinvestment and disciplined financial management.
This strength in cash flow is crucial for funding dividends and managing debt without compromising future growth. With $394.7 million in cash on the balance sheet and ample free cash flow, Lincoln Electric is well-positioned to maintain its dividend and navigate fluctuations in the industrial cycle. The company’s ability to consistently convert earnings into cash reflects a stable, well-run operation.
Analyst Ratings
📉 In recent weeks, Lincoln Electric Holdings (LECO) has experienced a range of analyst actions that show a cautious yet steady outlook. Morgan Stanley kept its underweight rating on the stock as of early May, while nudging the price target slightly up from $179 to $180. The tone here is one of restraint—recognizing value, but not quite enough momentum to shift their broader view.
📊 On the same date, KeyCorp reiterated its overweight rating, even as it trimmed its price target from $245 to $225. This kind of move suggests they still see long-term strength in the company’s fundamentals but are adjusting expectations in line with market shifts or recent performance blips.
➖ Stifel Nicolaus maintained a hold rating and nudged its target up just a bit, from $178 to $180. The message here is neutral—not bearish, not bullish—just a hold steady stance based on current trends.
🚀 Barclays took a more optimistic tone, raising their target from $220 to $235 while keeping an overweight rating. That kind of bump reflects confidence in the company’s ability to deliver growth, potentially through operational efficiencies or stronger-than-expected demand.
📈 Robert W. Baird slightly dialed back expectations, dropping their target from $242 to $212, but still labeled the stock as outperform. That signals they believe LECO can outpace peers even if the upside isn’t as high as previously anticipated.
💬 The overall analyst consensus stands at a moderate buy, with an average 12-month price target hovering around $206.40. That leaves some room for upside from where the stock is currently trading and suggests steady confidence in the company’s performance.
Earning Report Summary
Steady Growth in a Mixed Environment
Lincoln Electric kicked off 2025 with a solid first quarter, showing that even in a murky economic environment, the company can still find ways to grow. Net sales came in at just over $1 billion, up 2.4% from the same time last year. That bump wasn’t driven by a single big win, but rather a mix of things—recent acquisitions helped, adding nearly 5% to the top line, and some strategic price increases gave another boost. On the flip side, organic volumes dipped, and foreign exchange headwinds took a small bite out of results.
Operating income for the quarter landed at $164.9 million, making up 16.4% of sales. Adjusted figures nudged a little higher at 16.9%, though that’s slightly below where they were last year. Earnings per share came in at $2.10, with adjusted EPS at $2.16. Not a huge drop from last year’s $2.23, but it does show some margin pressure.
Where Lincoln Electric really shined this quarter was in its cash flow. The company brought in a record $186 million in operating cash flow, with a 130% cash conversion ratio. That’s a healthy figure, and it allowed them to return $150 million to shareholders through a mix of dividends and share repurchases.
CEO Commentary and Forward Outlook
CEO Steven Hedlund sounded pretty confident when reflecting on the quarter. He pointed out the company’s strong operational execution and the role of recent acquisitions in adding to both revenue and margin potential. He also emphasized that they’re not just sitting back—they’re continuing to invest in the business and carefully managing costs to stay nimble in what’s still a challenging economic landscape.
Looking ahead, Lincoln Electric is planning more price increases in the next quarter, especially in response to new tariff announcements. They’re aiming for a mid-single-digit price hike, which should help offset material cost increases and keep the pricing-cost balance intact. Despite the challenges, the company seems well-positioned, leaning on a strong balance sheet and consistent cash flow to keep delivering value for the long term.
Management Team
Lincoln Electric is guided by Steven B. Hedlund, who serves as President, CEO, and Chair of the Board. He’s been with the company since 2008 and has held a number of key roles, including Chief Operating Officer and President of Global Automation. His long tenure gives him deep insight into both the operational and strategic sides of the business.
The broader leadership team brings a mix of financial acumen, legal oversight, and operational focus. Gabriel Bruno serves as Executive Vice President, Chief Financial Officer, and Treasurer, managing the financial strategy. Jennifer I. Ansberry is the General Counsel, handling legal matters and governance. Lisa A. Dietrich heads up the IT department as Chief Information Officer, and Susan C. Edwards leads HR efforts, ensuring the company keeps talent development front and center. This team’s stability and strategic clarity support Lincoln Electric’s long-term growth mindset.
Valuation and Stock Performance
As of late May 2025, shares of Lincoln Electric are trading at $193.42, showing a slight decline on the day but remaining in the upper end of their 52-week range. Over the past year, the stock has seen highs of $222.52 and lows around $161.11. It’s been a somewhat choppy ride, but the broader trend still points toward resilience.
The company’s valuation metrics remain fairly attractive. With a forward price-to-earnings ratio of 21.37, investors are paying a reasonable multiple for expected earnings growth. The PEG ratio, which accounts for future growth, is 1.54—an indicator that the stock may still offer good value relative to its projected expansion.
Analyst sentiment has stayed mostly positive, falling into the category of a moderate buy. The average 12-month price target is about $206.40, which offers a bit of upside from current levels. The stock might not be grabbing headlines, but it’s holding steady and rewarding long-term holders.
Risks and Considerations
No company is without its risks, and Lincoln Electric is no exception. One of the more significant concerns is its exposure to economic cycles. As a key supplier to the industrial and construction sectors, any slowdown in those areas could weigh on demand.
There’s also the issue of raw material costs. Prices for things like steel and aluminum can swing, and that can squeeze margins if not managed carefully. So far, the company’s done a good job navigating these pressures, but it’s an area worth watching.
With operations in more than 160 countries, there’s a wide variety of geopolitical and currency risks to consider. Regulatory changes, tariffs, and global economic uncertainty can all impact performance in unpredictable ways. And while Lincoln Electric has made smart investments in automation and digital technology, staying ahead of the curve in an increasingly tech-driven market is essential. Falling behind could compromise its competitive edge.
Final Thoughts
Lincoln Electric has the kind of profile that appeals to patient, long-term investors. The company doesn’t overpromise, and it tends to deliver. With a steady hand at the helm, a team that knows its business, and financial discipline that supports consistent performance, the company remains on solid footing.
Its investments in automation, product innovation, and global expansion suggest a strategy that’s not just reactive but forward-looking. While the stock isn’t immune to broader market pressures or economic uncertainty, its ability to maintain strong margins and deliver reliable cash flow keeps it attractive to those who value consistency over flash.