Enerpac Tool Group (NYSE:EPAC) & Lincoln Electric (NASDAQ:LECO) Head-To-Head Review

Enerpac Tool Group (NYSE:EPAC) and Lincoln Electric (NASDAQ:LECO) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Institutional & Insider Ownership

97.7% of Enerpac Tool Group shares are held by institutional investors. Comparatively, 79.6% of Lincoln Electric shares are held by institutional investors. 1.1% of Enerpac Tool Group shares are held by insiders. Comparatively, 2.6% of Lincoln Electric shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Enerpac Tool Group and Lincoln Electric, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enerpac Tool Group	0	0	1	0	3.00
Lincoln Electric	1	1	3	0	2.40

Enerpac Tool Group currently has a consensus price target of $53.00, suggesting a potential upside of 39.29%. Lincoln Electric has a consensus price target of $206.40, suggesting a potential downside of 4.50%. Given Enerpac Tool Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe Enerpac Tool Group is more favorable than Lincoln Electric.

Dividends

Enerpac Tool Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. Lincoln Electric pays an annual dividend of $3.00 per share and has a dividend yield of 1.4%. Enerpac Tool Group pays out 2.5% 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 increased its dividend for 30 consecutive years. Lincoln Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Enerpac Tool Group and Lincoln Electric”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enerpac Tool Group	$589.51 million	3.49	$85.75 million	$1.63	23.34
Lincoln Electric	$4.01 billion	3.01	$466.11 million	$8.11	26.65

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Enerpac Tool Group	14.65%	24.04%	12.44%
Lincoln Electric	11.44%	39.44%	14.75%

Risk and Volatility

Enerpac Tool Group has a beta of 1.16, suggesting that its stock price is 16% more 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.

Summary

Lincoln Electric beats Enerpac Tool Group on 11 of the 17 factors compared between the two stocks.

About Enerpac Tool Group

Enerpac Tool Group Corp. manufactures and sells a range of industrial products and solutions in the United States, the United Kingdom, Germany, Australia, Canada, China, Saudi Arabia, Brazil, France, and internationally. It operates through Industrial Tools & Services and Other segments. The Industrial Tools & Services segment designs, manufactures, and distributes branded hydraulic and mechanical tools; and provides services and tool rentals to the infrastructure, industrial maintenance, repair and operations, oil and gas, mining, alternative and renewable energy, civil construction, and other markets. It also offers branded tools and engineered heavy lifting technology solutions, and hydraulic torque wrenches; maintenance and manpower services; high-force hydraulic and mechanical tools, including cylinders, pumps, valves, and specialty tools; and bolt tensioners and other miscellaneous products. This segment markets its branded tools and services primarily under the Enerpac, Hydratight, Larzep, and Simplex brands. The Other segment designs and manufactures synthetic ropes and biomedical textiles. The company was formerly known as Actuant Corporation and changed its name to Enerpac Tool Group Corp. in January 2020. Enerpac Tool Group Corp. was incorporated in 1910 and is headquartered in Menomonee Falls, Wisconsin.

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.