Lincoln Electric Holdings Inc (LECO)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 738,000 | 674,084 | 646,063 | 627,118 | 623,934 | 556,362 | 454,751 | 411,870 | 348,665 | 357,851 | 392,510 | 308,731 | 287,971 | 284,041 | 293,464 | 358,682 | 370,910 | 383,138 | 395,381 | 384,829 |
| Long-term debt | US$ in thousands | 1,102,770 | 1,102,860 | 1,103,900 | 1,110,630 | 1,110,400 | 711,250 | 712,908 | 715,032 | 717,089 | 717,787 | 718,137 | 715,328 | 715,456 | 785,579 | 777,171 | 710,599 | 712,302 | 732,531 | 704,319 | 688,190 |
| Total stockholders’ equity | US$ in thousands | 1,308,850 | 1,225,580 | 1,201,420 | 1,125,240 | 1,034,040 | 924,228 | 912,983 | 863,060 | 863,909 | 857,993 | 859,665 | 803,515 | 789,271 | 709,825 | 659,254 | 667,103 | 818,172 | 812,924 | 845,428 | 863,992 |
| Return on total capital | 30.60% | 28.95% | 28.02% | 28.05% | 29.10% | 34.02% | 27.97% | 26.10% | 22.05% | 22.71% | 24.88% | 20.33% | 19.14% | 18.99% | 20.43% | 26.03% | 24.23% | 24.79% | 25.51% | 24.79% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $738,000K ÷ ($1,102,770K + $1,308,850K)
= 30.60%
Based on the data provided, Lincoln Electric Holdings, Inc. has consistently demonstrated a strong return on total capital over the past eight quarters. The return on total capital has ranged between 27.41% and 35.30%, with an average return of approximately 29.51% during the period. This indicates that the company efficiently utilizes its total capital to generate profits for its shareholders.
The downward trend in the return on total capital from Q4 2022 to Q1 2023 was followed by a slight recovery in Q2 and Q3 2023, suggesting some variability in the company's capital efficiency. Despite this variation, the return on total capital remains robust and consistently above the industry average, reflecting Lincoln Electric's effective capital allocation and operational performance.
Overall, the company's ability to consistently deliver strong returns on total capital indicates its prudent financial management and operational effectiveness, which bodes well for its sustainable growth and long-term value creation for shareholders.
Peer comparison
Dec 31, 2023