Financial Survey: Spx Flow (FLOW) and Lincoln Electric (LECO)

Spx Flow (NYSE: FLOW) and Lincoln Electric (NASDAQ:LECO) are both mid-cap industrial products companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, analyst recommendations, profitability, earnings and risk.

Insider & Institutional Ownership

87.5% of Spx Flow shares are owned by institutional investors. Comparatively, 66.9% of Lincoln Electric shares are owned by institutional investors. 2.0% of Spx Flow shares are owned by insiders. Comparatively, 3.0% of Lincoln Electric shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spx Flow 1 4 4 0 2.33
Lincoln Electric 0 3 8 0 2.73

Spx Flow presently has a consensus price target of $54.60, indicating a potential upside of 15.78%. Lincoln Electric has a consensus price target of $103.67, indicating a potential upside of 21.89%. Given Lincoln Electric’s stronger consensus rating and higher possible upside, analysts clearly believe Lincoln Electric is more favorable than Spx Flow.

Valuation & Earnings

This table compares Spx Flow and Lincoln Electric’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Spx Flow $1.95 billion 1.03 $46.40 million $1.27 37.13
Lincoln Electric $2.62 billion 2.13 $247.50 million $3.79 22.44

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

Dividends

Lincoln Electric pays an annual dividend of $1.56 per share and has a dividend yield of 1.8%. Spx Flow does not pay a dividend. Lincoln Electric pays out 41.2% of its earnings in the form of a dividend. Lincoln Electric has raised its dividend for 14 consecutive years.

Volatility and Risk

Spx Flow has a beta of 1.93, indicating that its stock price is 93% more volatile than the S&P 500. Comparatively, Lincoln Electric has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Spx Flow 2.38% 6.13% 2.00%
Lincoln Electric 9.01% 29.39% 11.56%

Summary

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

Spx Flow Company Profile

SPX FLOW, Inc. provides various engineered solutions worldwide. The company engineers, designs, manufactures, and markets products and solutions used to process, blend, filter, dry, meter, and transport fluids with a focus on original equipment installation, including turn-key systems, modular systems, and components, as well as aftermarket components and support services. It operates through three segments: Food and Beverage, Power and Energy, and Industrial. The Food and Beverage segment offers mixing, drying, evaporation, and separation systems and components; heat exchangers, and reciprocating and centrifugal pump technologies; and turn-key systems primarily under the Anhydro, APV, Bran+Luebbe, Gerstenberg Schroeder, LIGHTNIN, Seital, and Waukesha Cherry-Burrell brands. The Power and Energy segment provides pumps, valves, and related accessories primarily for customers in oil and gas, and nuclear and other conventional power industries under the APV, Bran+Luebbe, ClydeUnion Pumps, Copes-Vulcan, Dollinger Filtration, LIGHTNIN, M&J Valve, Plenty, and Vokes brands. The Industrial segment offers air dryers, filtration equipment, mixers, pumps, hydraulic technologies, and heat exchangers under the Airpel, APV, Bolting Systems, Delair, Deltech, Hankison, Jemaco, Johnson Pump, LIGHTNIN, Power Team, and Stone brands. This segment primarily serves customers in chemical, air treatment, mining, pharmaceutical, marine, shipbuilding, infrastructure construction, general industrial, and water treatment industries. SPX FLOW, Inc. is headquartered in Charlotte, North Carolina.

Lincoln Electric Company Profile

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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