Dividend Growth Stock Overview: Lincoln Electric Holdings

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About Lincoln Electric Holdings

Lincoln Electric Holdings is a worldwide broad line manufacturer of welding, cutting and brazing products. The company manufactures these industrial products in a range of sizes, from light manufacturing to high volume robotic operations, to support a variety of industries. These industries include shipbuilding, automotive manufacturing, pipe mills, structural steel construction, and heavy equipment fabrication. The company employs 10,000 people worldwide and has its headquarters in Cleveland, Ohio.

The history of Lincoln Electric Holdings dates back to 1895 when The Lincoln Electric Company was incorporated in Ohio. In 1998, the company was restructured to create Lincoln Electric Holdings, with the original Lincoln Electric Company as one of its subsidiaries. The company was listed on the NASDAQ in June 1995; prior to that, it was traded on the OTC markets.

The company has manufacturing facilities around the world and divides its operations into 5 operating segments, with 4 of them based on the geographical distribution of the company’s welding manufacturing operations.  The four geographically-based segments are: (1) North American Welding, which covers welding operations in the U.S., Canada and Mexico and provides over 60% of Lincoln Electric’s total sales; (2) Europe Welding, which includes Russia, Africa and the Middle East, and provides about 15% of total company sales; (3) Asia Pacific Welding, covering China and Australia, and which provides about 10% of total company sales; and (4) South American Welding, which covers operations in Brazil, Columbia and Venezuela, and provides about 5% of total company sales.  The 5th segment, The Harris Products Group, is responsible for the brazing, soldering and cutting operations worldwide and retail business in the U.S.  The Harris Products Group provides the remainder of the company’s sales.

The company is a member of the S&P Mid Cap 400 index and trades under the ticker symbol LECO.

Lincoln Electric’s Dividend and Stock Split History

Lincoln Electric Holdings has paid dividends annually since 1915 and has increased them since 1995. Lincoln Electric generally announces dividend increases at the end of October, with the stock going ex-dividend at the end of December.

Lincoln Electric has compounded its payout at an average rate of 15.2% over the last 5 years and 12.2% over the last 10 years.

Since beginning its record of dividend growth, the company has split its stock 3 times, with 2-for-1 splits in June 1995, June 1998 and June 2011. Each share of stock purchased when Lincoln Electric began raising its dividend annually would have split into 8 shares.

Lincoln Electric history of stock splits pre-dates its dividend growth history, with 10-for-1 splits in 1919, 1930 and 1993, and a 5-for-1 split in 1965.

Lincoln Electric’s Direct Purchase and Dividend Reinvestment Plans

Lincoln Electric has both direct purchase and dividend reinvestment plans. You must already be an investor in Lincoln Electric to participate in the plans; if you own the stock in your brokerage account, you’ll have to have them transferred into your name in order to join the plans. The minimum amount for additional direct purchases is $10 and the monthly maximum is $1,000. The dividend reinvestment plan allows for partial reinvestment of dividends.

The direct purchase plan is extremely favorable to investors, as Lincoln Electric covers all the transaction and per share fees for additional direct purchases and dividend reinvestments. Like most DRIP plans, there are fees when you go to sell your stock in the plan. You’ll pay a transaction fee of between $15 and $30 depending on the type of sell order that you request, along with a commission of 10 cents per share. You will also pay an additional fee of $5 to have the proceeds directly deposited into your account.

Helpful Links

Lincoln Electric Holdings’ Investor Relations Website

Current quote and financial summary for Lincoln Electric Holdings (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Lincoln Electric Holdings

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