Head to Head Contrast: Amada (OTCMKTS:AMDLY) and Lincoln Electric (NASDAQ:LECO)

Amada (OTCMKTS:AMDLY) and Lincoln Electric (NASDAQ:LECO) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, valuation, earnings, profitability and risk.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Amada and Lincoln Electric, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amada	0	0	0	0	0.00
Lincoln Electric	1	1	3	0	2.40

Lincoln Electric has a consensus price target of $222.60, indicating a potential downside of 0.32%. Given Lincoln Electric’s stronger consensus rating and higher possible upside, analysts plainly believe Lincoln Electric is more favorable than Amada.

Institutional & Insider Ownership

79.6% of Lincoln Electric shares are held by institutional investors. 2.4% of Lincoln Electric shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Amada has a beta of 0.15, suggesting that its stock price is 85% less volatile than the S&P 500. Comparatively, Lincoln Electric has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.

Valuation & Earnings

This table compares Amada 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
Amada	$2.60 billion	1.35	$213.75 million	$2.60	16.51
Lincoln Electric	$4.01 billion	3.11	$466.11 million	$8.11	27.54

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

Dividends

Amada pays an annual dividend of $1.22 per share and has a dividend yield of 2.8%. Lincoln Electric pays an annual dividend of $3.00 per share and has a dividend yield of 1.3%. Amada pays out 46.9% of its earnings in the form of a dividend. Lincoln Electric pays out 37.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lincoln Electric has raised its dividend for 30 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Amada	8.17%	6.11%	4.88%
Lincoln Electric	11.44%	39.44%	14.75%

Summary

Lincoln Electric beats Amada on 16 of the 17 factors compared between the two stocks.

About Amada

Amada Co., Ltd., together with its subsidiaries, manufactures, sells, leases, repairs, maintains, checks, and inspects metalworking machinery, software, and peripheral equipment in Japan, North America, Europe, Asia, and internationally. It offers sheet metal fabrication machines, including laser machines, punch and laser combination machines, turret punch presses, press brakes, bending robots, and welders, as well as software solutions; general fabrication machines, such as shearing and deburring machines, corner shear, iron worker, AMS SPACE series, horizontal benders, tapping and fastener insertion machines, and environment related products; cutting fluids, lubricants, and other consumables; and a range of tools for bending and punching. The company also provides metal cutting machines, such as hyper saw, pulse cutting band saw, automatic and semi-automatic general-purpose band saw, vertical band saw, circular saw, and other machines; structural steel machines; grinding machines; and band saw blades and circular saw blades that are used for metal cutting machines. In addition, it offers precision welding machines, including laser welders and markers, resistance welders, and systems for use in automobile parts, electronic components, and medical instruments. Further, the company provides consumables, and tooling equipment. Additionally, it offers stamping presses and stamping press equipment, and spring machines. The company was formerly known as Amada Holdings Co., Ltd. Amada Co., Ltd. was founded in 1946 and is headquartered in Isehara, Japan.

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.