Lincoln Electric’s 32.6% Payout Ratio Shows Wide Margin of Safety for Income Investors

1 week ago 10

William Temple

Mon, December 8, 2025 astatine 11:00 AM CST 4 min read

A fiscal infographic for Lincoln Electric (LECO) titled '30 Years Consecutive Dividend Growth'. Key fiscal metrics are displayed: a 5.3% dividend increase, 1.23% yield, and $3.04/share payout. It besides highlights 'Record Cash Flow: $205.1M Q3 FCF (149% Conversion)' and a 'Payout Ratio: 32.6% (SAFE)'. Small barroom charts exemplify currency travel and payout ratio. A enactment mentions '*Rising Debt ($1.32B) vs. Strategic Growth'.

Lincoln Electric (LECO) raised its quarterly dividend 5.3% to $0.79 per share. This marks 30 consecutive years of dividend increases.
Lincoln Electric’s net payout ratio sits astatine 32.6% with Q3 escaped currency travel of $205M.
Total indebtedness roseate 13.8% to $1.32B owed to the Alloy Steel acquisition.
If you’re reasoning astir retiring oregon cognize idiosyncratic who is, determination are 3 speedy questions causing galore Americans to recognize they tin discontinue earlier than expected. instrumentality 5 minutes to learn much here

Lincoln Electric Holdings (NASDAQ: LECO) declared a quarterly dividend of $0.79 per share, a 5.3% summation marking the company's 30th consecutive twelvemonth of dividend growth. With a existent output of 1.23% and yearly payout of $3.04 per share, tin this concern welding elephantine prolong its three-decade streak?

This infographic details Lincoln Electric's (LECO) awesome 30-year dividend growth, supported by beardown financials including a steadfast payout ratio, robust currency flow, and manageable debt, culminating successful a 'Safe' dividend information rating.

Metric

Value

Annual Dividend	$3.04 per share
Dividend Yield	1.23%
Consecutive Years of Increases	30 years
Most Recent Increase	5.3% (October 2025)
Dividend Aristocrat Status	Yes (25+ years)

Lincoln Electric's dividend sum looks comfortable. With trailing twelve-month diluted EPS of $9.33, the yearly dividend of $3.04 translates to an net payout ratio of 32.6%, leaving two-thirds of profits for reinvestment oregon indebtedness reduction.

Cash travel reinforces this strength. In Q3 2025, the institution generated $205.1 cardinal successful escaped currency travel (operating currency travel of $236.7 cardinal minus capex of $31.6 million). Against quarterly dividends totaling astir $41 cardinal based connected 55 cardinal shares outstanding, the FCF payout ratio sits comfortably beneath 50%. CFO Gabriel Bruno noted the institution achieved "record currency travel procreation with 149% currency conversion," providing important cushion for dividend payments.

Metric

Value

Assessment

Earnings Payout Ratio	32.6%	Healthy
Q3 FCF	$205.1M	Strong
Cash Conversion	149%	Excellent
Operating Margin	17.4%	Solid

The equilibrium expanse presents a much nuanced picture. Total indebtedness accrued 13.8% twelvemonth implicit twelvemonth to $1.32 billion, driven by the Alloy Steel acquisition. Net indebtedness stands astatine $939 cardinal aft accounting for $377 cardinal successful cash. At 1.15x nett indebtedness to EBITDA, leverage remains manageable but has trended upward from 0.91x successful 2023.

The debt-to-equity ratio of 0.99 sits adjacent parity, portion full liabilities jumped 14.8% twelvemonth implicit year. Bruno noted the institution is "increasing our involvement disbursal presumption to a debased $50 cardinal scope owed to caller borrowings for the Alloy Steel transaction." With EBITDA of $813 million, involvement sum appears adequate, though rising indebtedness work volition devour currency that could different enactment dividend growth.