Lincoln Electric (LECO) versus SPX (SPXC) Financial Survey

Lincoln Electric (NASDAQ: LECO) and SPX (NYSE:SPXC) are both industrial products companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Profitability

This table compares Lincoln Electric and SPX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lincoln Electric 9.43% 28.76% 11.24%
SPX 6.26% 31.70% 4.02%



Dividends

Lincoln Electric pays an annual dividend of $1.56 per share and has a dividend yield of 1.7%. SPX does not pay a dividend. Lincoln Electric pays out 41.2% of its earnings in the form of a dividend. Lincoln Electric has increased its dividend for 14 consecutive years.

Earnings & Valuation

This table compares Lincoln Electric and SPX’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lincoln Electric $2.62 billion 2.26 $247.50 million $3.79 23.83
SPX $1.43 billion 0.98 $89.30 million $1.78 18.30

Lincoln Electric has higher revenue and earnings than SPX. SPX is trading at a lower price-to-earnings ratio than Lincoln Electric, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Lincoln Electric has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, SPX has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500.

Insider & Institutional Ownership

67.0% of Lincoln Electric shares are owned by institutional investors. Comparatively, 86.7% of SPX shares are owned by institutional investors. 3.3% of Lincoln Electric shares are owned by company insiders. Comparatively, 0.6% of SPX shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Lincoln Electric and SPX, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lincoln Electric 0 3 8 0 2.73
SPX 0 1 1 0 2.50

Lincoln Electric currently has a consensus price target of $104.78, suggesting a potential upside of 16.02%. SPX has a consensus price target of $36.50, suggesting a potential upside of 12.03%. Given Lincoln Electric’s stronger consensus rating and higher possible upside, research analysts clearly believe Lincoln Electric is more favorable than SPX.

Summary

Lincoln Electric beats SPX on 13 of the 17 factors compared between the two stocks.

About Lincoln Electric

Lincoln Electric Holdings, Inc. is a manufacturer of welding, cutting and brazing products. The Company operates through three segments: Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment primarily includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses, as well as the retail business in the United States. Its welding products include arc welding power sources, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories, and specialty welding consumables and fabrication. Its product offerings also include computer numeric controlled plasma and oxy-fuel cutting systems, and regulators and torches used in oxy-fuel welding, cutting and brazing.

About SPX

SPX Corporation supplies infrastructure equipment serving the heating and ventilation (HVAC), detection and measurement, power transmission and generation, and industrial markets in the United States, China, South Africa, the United Kingdom, and internationally. It operates through three segments: HVAC, Detection and Measurement, and Engineered Solutions. The HVAC segment engineers, designs, manufactures, installs, and services cooling products for the HVAC and industrial markets, as well as boilers, comfort heating, and ventilation products for the residential and commercial markets. The Detection and Measurement segment offers underground pipe and cable locators, and inspection equipment, as well as bus fare collection systems, communication technologies, and specialty lighting products. The Engineered Solutions segment provides transformers for the power transmission and distribution markets; and process cooling equipment, as well as rotating and stationary heat exchangers for the industrial and power generation markets. This segment sells transformers for publicly and privately held utilities under the Waukesha brand name; and process cooling products and heat exchangers under the brand names of the SPX Cooling, Marley, Yuba, and Ecolaire. The company markets its products through various distribution channels, such as direct to customers, independent manufacturing representatives, third-party distributors, and retailers. SPX Corporation is headquartered in Charlotte, North Carolina.

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