Critical Survey: Lincoln Electric (NASDAQ:LECO) and Core & Main (NYSE:CNM)

Lincoln Electric (NASDAQ:LECO) and Core & Main (NYSE:CNM) are both large-cap industrials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Earnings and Valuation

This table compares Lincoln Electric and Core & Main”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lincoln Electric	$4.01 billion	3.09	$466.11 million	$8.11	27.37
Core & Main	$7.44 billion	1.64	$411.00 million	$2.15	28.85

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

Volatility and Risk

Lincoln Electric has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, Core & Main has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Lincoln Electric and Core & Main, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lincoln Electric	1	1	3	0	2.40
Core & Main	1	3	7	0	2.55

Lincoln Electric currently has a consensus target price of $211.40, indicating a potential downside of 4.77%. Core & Main has a consensus target price of $60.00, indicating a potential downside of 3.26%. Given Core & Main’s stronger consensus rating and higher probable upside, analysts plainly believe Core & Main is more favorable than Lincoln Electric.

Insider & Institutional Ownership

79.6% of Lincoln Electric shares are owned by institutional investors. Comparatively, 94.2% of Core & Main shares are owned by institutional investors. 2.6% of Lincoln Electric shares are owned by insiders. Comparatively, 3.5% of Core & Main shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Lincoln Electric and Core & Main’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lincoln Electric	11.44%	39.44%	14.75%
Core & Main	5.47%	23.55%	6.80%

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, and education solutions, as well as a portfolio of automated solutions for joining, cutting, material handling, module assembly, and end of line testing, as well as involved in brazing and soldering alloys, and in the retail business in the United States. In addition, 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; provides specialty welding consumables, wear plates and maintenance and repair services for alloy and wear-resistant products used in mining, steel, agricultural, and industrial mill applications; and designs and manufactures robotic assembly and arc welding systems that automate the tacking and welding of steel beams. Further, the company serves general fabrication, oil and gas, power generation, 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.

About Core & Main

Core & Main, Inc. is a specialty distributor focused on water, wastewater, storm drainage and fire protection products, and related services. The company provides infrastructure solutions to municipalities, private water companies and professional contractors across municipal, non-residential, and residential end markets, nationwide. The company was founded in 1874 and is headquartered in St. Louis, MO.