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Lincoln Electric’s 30th Dividend Hike Tests the Staying Power of Its Capital Allocation Playbook (LECO)

Simply Wall St · 2d ago
  • In early December 2025, Lincoln Electric Holdings raised its quarterly dividend by 5.3% to US$0.79 per share, achieving its 30th straight year of dividend increases while maintaining a payout ratio of 32.6% and manageable leverage after the Alloy Steel acquisition.
  • At the same time, short interest as a share of float has fallen to 1.41%, well below the peer average, hinting that traders are growing less pessimistic even as the company contends with softer organic growth and pressure on returns on capital.
  • We’ll now examine how this latest dividend increase and Lincoln Electric’s long dividend-growth record shape the company’s broader investment narrative.

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Lincoln Electric Holdings Investment Narrative Recap

To own Lincoln Electric, you need to believe it can keep converting its strong welding franchise into resilient cash flows despite cyclical end markets and softer organic growth. The latest dividend hike and lower short interest modestly support that thesis, but do not materially change the near term tension between acquisition reliant growth and pressure on returns on capital.

The 5.3% dividend increase to US$0.79 per share, with a 32.6% payout ratio and leverage still described as manageable after the Alloy Steel acquisition, reinforces the importance of disciplined capital allocation as a key catalyst, especially when organic volumes and returns on capital are under strain.

Yet, even with 30 years of dividend growth, investors should still be watching the risk that organic demand remains weak while price increases do most of the work...

Read the full narrative on Lincoln Electric Holdings (it's free!)

Lincoln Electric Holdings’ narrative projects $4.8 billion revenue and $664.5 million earnings by 2028. This requires 5.4% yearly revenue growth and about a $161.6 million earnings increase from $502.9 million today.

Uncover how Lincoln Electric Holdings' forecasts yield a $263.90 fair value, a 11% upside to its current price.

Exploring Other Perspectives

LECO 1-Year Stock Price Chart
LECO 1-Year Stock Price Chart

Three fair value estimates from the Simply Wall St Community span roughly US$219 to US$290 per share, highlighting how far apart individual views on Lincoln Electric can be. You will want to weigh those opinions against the risk that volume growth continues to lag price increases, which could limit how effectively the business converts its strong franchise into future earnings power.

Explore 3 other fair value estimates on Lincoln Electric Holdings - why the stock might be worth as much as 22% more than the current price!

Build Your Own Lincoln Electric Holdings Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.