Contrasting AB SKF (publ) (OTCMKTS:SKUFF) and Lincoln Electric (NASDAQ:LECO)

AB SKF (publ) (OTCMKTS:SKUFF) and Lincoln Electric (NASDAQ:LECO) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Dividends

AB SKF (publ) pays an annual dividend of $5.50 per share and has a dividend yield of 34.4%. Lincoln Electric pays an annual dividend of $2.56 per share and has a dividend yield of 1.4%. AB SKF (publ) pays out 148.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lincoln Electric pays out 31.3% of its earnings in the form of a dividend. Lincoln Electric has raised its dividend for 27 consecutive years.

Earnings & Valuation

This table compares AB SKF (publ) and Lincoln Electric’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AB SKF (publ)	N/A	N/A	N/A	$3.70	4.33
Lincoln Electric	$3.97 billion	2.62	$472.22 million	$8.19	22.10

Lincoln Electric has higher revenue and earnings than AB SKF (publ). AB SKF (publ) 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 summary of recent ratings and recommmendations for AB SKF (publ) and Lincoln Electric, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AB SKF (publ)	0	0	0	0	N/A
Lincoln Electric	0	4	2	0	2.33

Lincoln Electric has a consensus target price of $187.00, suggesting a potential upside of 3.30%. Given Lincoln Electric’s higher probable upside, analysts plainly believe Lincoln Electric is more favorable than AB SKF (publ).

Profitability

This table compares AB SKF (publ) and Lincoln Electric’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AB SKF (publ)	N/A	N/A	N/A
Lincoln Electric	12.04%	46.60%	16.11%

Institutional & Insider Ownership

34.6% of AB SKF (publ) shares are owned by institutional investors. Comparatively, 75.8% of Lincoln Electric shares are owned by institutional investors. 2.9% of Lincoln Electric shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Lincoln Electric beats AB SKF (publ) on 12 of the 13 factors compared between the two stocks.

About AB SKF (publ)

AB SKF (publ) engages in the design, development, and manufacture of bearings, seals, lubrication systems, and services worldwide. The company operates in segments, Industrial and Automotive. It offers rolling bearings, mounted bearings and housings, super-precision bearings, slewing bearings, plain bearings, magnetic bearings and systems, thin section bearing, industrial and automotive seals, lubrication management solutions, maintenance products, condition monitoring systems, power transmission solutions, test and measuring equipment, vehicle aftermarket, and waste electric and electronic equipment products. The company also provides various services, including application engineering, asset management, condition-based maintenance, mechanical maintenance, remanufacturing and customization, and training solutions. It offers its solutions for various industries, including aerospace, agriculture, cars and light trucks, construction, food and beverage, general machinery, machine tools, marine, material handling, metals, mining, mineral processing and cement, ocean energy, oil and gas, pulp and paper, railways, trucks, trailers, buses, two and three wheelers, and wind energy. The company was founded in 1907 and is headquartered in Gothenburg, Sweden.

About Lincoln Electric

Lincoln Electric Holdings, Inc., through its subsidiaries, designs, develops, manufactures, and sells welding, cutting, and brazing products worldwide. The company operates through three segments: Americas Welding, International Welding, and The Harris Products Group. It offers brazing and soldering filler metals, arc welding equipment, plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, and specialty gas regulators, as well as consumables used in the brazing and soldering alloys market. In addition, it is involved in the retail business in the United States. Further, the company manufactures copper and aluminum headers, distributor assemblies, and manifolds for the heating, ventilation, and air conditioning sector in the United States and Mexico. The company serves general fabrication, energy and process, automotive and transportation, and construction and infrastructure industries, as well as heavy fabrication, ship building, and maintenance and repair markets. It sells its products directly to users of welding products, as well as through industrial distributors, retailers, and agents. The company was founded in 1895 and is headquartered in Cleveland, Ohio.