Can Lincoln Electric Increase Its Dividend Payouts in Fiscal 2016?



Lincoln Electric’s dividends matter

Lincoln Electric’s (LECO) dividends matter significantly, as they have been consistently increasing since 2010. In a volatile environment, where companies are struggling to grow their revenues, LECO has increased its 2015 dividend per share by 21% over 2014.

LECO recently declared a dividend per share of $0.32, payable on July 15, 2016. The company has declared a quarterly dividend of $0.64 per share to its shareholders in 2016. The company paid a dividend of $1.19 per share in 2015.

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Dividend yield

LECO has a current indicated dividend yield of ~2.1%. Illinois Tools Works (ITW) has a similar yield of ~2.0%. Stanley Black & Decker (SWK) has the lowest indicated dividend yield of ~1.5%, while The Timken Company (TKR) has one of the highest dividend yields among its industry peers at 3.3%.

Has Lincoln’s dividend payout increased?

LECO has a history of increasing dividend payouts.  In 2015, it paid a dividend of $0.29 in 3Q15, increased it by 10.3% to $0.32 in 4Q15, and maintained it at $0.32 in 1Q16 and 2Q16.

LECO’s dividend has been consistently increasing. The company has also been rewarding its shareholders through stock repurchases.

Lincoln Electric’s stock repurchases

For fiscal 2016, Lincoln Electric is targeting $400 million of share repurchases while $399 million was achieved in fiscal 2015. Stock repurchases should enhance the company’s earnings per share by reducing the number of outstanding shares.

Investors who want to trade in stock that pay dividends can consider investing in the SPDR S&P Dividend ETF (SDY). Major holdings in SDY include HCP (HCP) with a 2.6% weight, AT&T (T) with a 1.9% weight, and Chevron (CVX) with a 1.7% weight.


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