Financial Survey: NIPPON Stl & SU/S (NSSMY) versus Lincoln Electric (LECO)

NIPPON Stl & SU/S (OTCMKTS:NSSMY) and Lincoln Electric (NASDAQ:LECO) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Profitability

This table compares NIPPON Stl & SU/S and Lincoln Electric’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NIPPON Stl & SU/S 3.84% 6.25% 2.88%
Lincoln Electric 8.77% 29.77% 11.62%

Earnings and Valuation

This table compares NIPPON Stl & SU/S and Lincoln Electric’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NIPPON Stl & SU/S $51.19 billion 0.39 $1.76 billion N/A N/A
Lincoln Electric $2.62 billion 2.25 $247.50 million $3.79 23.95

NIPPON Stl & SU/S has higher revenue and earnings than Lincoln Electric.

Analyst Ratings

This is a breakdown of recent ratings for NIPPON Stl & SU/S and Lincoln Electric, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NIPPON Stl & SU/S 0 0 0 0 N/A
Lincoln Electric 0 3 7 0 2.70

Lincoln Electric has a consensus price target of $105.71, suggesting a potential upside of 16.48%. Given Lincoln Electric’s higher possible upside, analysts clearly believe Lincoln Electric is more favorable than NIPPON Stl & SU/S.

Institutional & Insider Ownership

0.0% of NIPPON Stl & SU/S shares are owned by institutional investors. Comparatively, 70.3% of Lincoln Electric shares are owned by institutional investors. 3.0% of Lincoln Electric shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

NIPPON Stl & SU/S pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Lincoln Electric pays an annual dividend of $1.56 per share and has a dividend yield of 1.7%. 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. Lincoln Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

NIPPON Stl & SU/S has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, Lincoln Electric has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Summary

Lincoln Electric beats NIPPON Stl & SU/S on 11 of the 15 factors compared between the two stocks.

About NIPPON Stl & SU/S

Nippon Steel & Sumitomo Metal Corporation engages in steelmaking and steel fabrication businesses worldwide. It operates in five segments: Steelmaking and Steel Fabrication, Engineering and Construction, Chemicals, New materials, and System Solutions. The company offers steel plates; hot- and cold-rolled steel sheets and coils, coated steel sheets, color coated steel sheets, electrolytic tin plates, and electrical steel sheets; bar and rod materials; and structural steel products. It also provides pipes and tubes; and railway, automotive, and construction and industrial machinery parts, such as railway wheels, driving mechanisms, axles, couplers, bogie trucks, brake disks, control bogies, brake calipers, test equipment, crankshafts and front axles, aluminum wheels, permanent magnet retarders, die materials, mill rolls, circular forgings, forged products for power generation, and shape-memory alloys. In addition, the company offers titanium products for use in automobiles, architecture, civil engineering and ocean development, aircraft, sports gears and consumer products, welded tubes, PHE, and chemical and electrolytic fields; stainless steel sheets, shapes, plates, and wire rods, as well as strips, clad steel sheets, nickel and nickel alloy products, and crystal series products; and steel slags. Further, it manufactures and markets industrial machinery and equipment; performs construction work under contract; and engages in waste processing and recycling activities, as well as in supplying electricity, gas, and heat. Additionally, the company offers coal-based chemical products and petrochemicals, as well as electronic materials; and materials for semiconductors and electronic parts, carbon fiber and composite products, and products that apply technologies for metal processing. It also provides computer systems engineering and consulting services; and IT-enabled outsourcing and other services. The company was founded in 1949 and is headquartered in Tokyo, Japan.

About Lincoln Electric

Lincoln Electric Holdings, Inc., through its subsidiaries, designs, manufactures, and sells welding, cutting, and brazing products worldwide. It operates through three segments: Americas Welding, International Welding, and The Harris Products Group. The company's welding products include arc welding power sources, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories, and specialty welding consumables and fabrication products. It also provides computer numeric controlled plasma and oxy-fuel cutting systems, and regulators and torches used in oxy-fuel welding, cutting, and brazing; and consumables used in the brazing and soldering alloys market. In addition, the company is involved in the retail business in the United States. It serves general fabrication, energy and process, automotive and transportation, heavy fabrication, and construction and infrastructure industries, as well as ship building and maintenance and repair markets. The company sells its products directly to users of welding products, as well as through industrial distributors, retailers, and agents. Lincoln Electric Holdings, Inc. was founded in 1895 and is headquartered in Cleveland, Ohio.

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