Analyzing NN (NASDAQ:NNBR) and Lincoln Electric (NASDAQ:LECO)

NN (NASDAQ:NNBR) and Lincoln Electric (NASDAQ:LECO) are both industrial products companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Risk and Volatility

NN has a beta of 3.28, meaning that its share price is 228% more volatile than the S&P 500. Comparatively, Lincoln Electric has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Valuation and Earnings

This table compares NN and Lincoln Electric’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NN $427.53 million 0.51 -$100.59 million ($0.16) -31.94
Lincoln Electric $2.66 billion 2.93 $206.12 million $4.15 31.60

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

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NN 0 1 1 0 2.50
Lincoln Electric 0 3 4 0 2.57

NN presently has a consensus price target of $9.00, suggesting a potential upside of 76.13%. Lincoln Electric has a consensus price target of $134.00, suggesting a potential upside of 2.17%. Given NN’s higher probable upside, equities analysts clearly believe NN is more favorable than Lincoln Electric.

Profitability

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

Net Margins Return on Equity Return on Assets
NN 32.94% 5.90% 1.50%
Lincoln Electric 9.97% 41.01% 13.79%

Insider & Institutional Ownership

84.9% of NN shares are owned by institutional investors. Comparatively, 74.2% of Lincoln Electric shares are owned by institutional investors. 2.1% of NN shares are owned by insiders. Comparatively, 3.4% of Lincoln Electric shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Lincoln Electric beats NN on 10 of the 14 factors compared between the two stocks.

NN Company Profile

NN, Inc. engages in the design and manufacture high-precision components and assemblies primarily for the electrical, automotive, general industrial, aerospace and defense, and medical markets. It operates through the Mobile Solutions and Power Solutions segments. The Mobile Solutions segment manufactures system critical components for fuel systems, engines and transmissions, power steering systems, and electromechanical motors. The Power Solutions segment designs and produces a broad range of high-precision metal and plastic components, assemblies, and finished devices used in applications ranging from power control to flight control, and for military devices. The company was founded by Richard D. Ennen in October 1980 and is headquartered in Charlotte, NC.

Lincoln Electric Company Profile

Lincoln Electric Holdings, Inc. engages in the manufacture of arc welding equipment, consumable welding products and other welding and cutting products. Its welding products include arc welding power sources, wire feeding systems, robotic welding packages, fume extraction equipment, consumable electrodes and fluxes. The firm offers CNC plasma and oxy-fuel cutting systems, regulators and torches used in oxy-fuel welding, cutting and brazing. It operates through the following 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. The company was founded on 1895 and is headquartered in Cleveland, OH.

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