Exploring Lincoln Electric Holdings, Inc. (LECO): One of the Overlooked Dividend Stocks to Buy Now
In a landscape where dividend investing has recently lost its allure, stocks like Lincoln Electric Holdings, Inc. (NASDAQ: LECO) are making waves again. With investors increasingly shifting their focus towards growth stocks for rapid gains, the reliability and stability of dividend-paying stocks are often overlooked. However, as market dynamics shift—partly influenced by geopolitical developments—the conversation around dividends is revitalizing.
The S&P Dividend Aristocrats Index, which lists companies boasting at least 25 consecutive years of dividend growth, has recently seen a dip of just over 2.5% since the beginning of 2025, a marked outperformance compared to the broader market’s 6% decline. This downturn provides a unique opportunity for savvy investors to re-evaluate dividend stocks, which often outperform during broader market recessions, as evidenced during the downturns of 1981, 2001, and 2007.
Investors should recognize that while dividend reductions are a genuine concern, they should not discount high-quality dividend stocks altogether. This investment strategy can yield significant returns when done thoughtfully. According to M&G Investments, dividends not only provide immediate income; they often reflect a company’s financial health and the confidence of its management. In fact, over the last 25 years, nearly half of the gains in U.S. stocks originated from reinvested dividends, highlighting their critical role in long-term wealth accumulation.
The Corporate Dividend Dilemma
Understanding that dividends are not guaranteed must inform your investment decisions. Companies face a balancing act between distributing profits to shareholders and retaining earnings for future growth. A high payout ratio—typically over 75%—may indicate potential sustainability issues. Overcommitting to dividends could slow business expansion and hinder long-term share value growth.
Lincoln Electric Holdings, Inc. (LECO): A Closer Look
Lincoln Electric Holdings is a well-established player in the welding and industrial automation sectors. The company is currently making significant strides, particularly in the industrial automation space, with anticipations of nearly $1 billion in revenue growth. Their commitment to high-quality products and brand loyalty places them on steady ground in a mature market.
In the fourth quarter of 2024, Lincoln reported revenues of approximately $1.02 billion, surpassing analyst expectations by over $26 million despite a slight year-over-year decline of 3.45%. However, it faced macroeconomic challenges that affected demand in the industrial sector. The net income reflected a 10.5% decline at $140.2 million, illustrating the broader market challenges that even resilient companies like Lincoln must navigate.
The company recently revealed that it ended the year with over $377 million in cash and cash equivalents, demonstrating financial prudence. Returning $426 million to shareholders through dividends and share buybacks reaffirms its dedication to rewarding investors and speaks volumes about its long-term intentions. With a track record of raising dividends for 29 consecutive years, Lincoln’s quarterly dividend is currently set at $0.75 per share, translating to a yield of 1.61% as of late April.
Beyond Lincoln: Identify Hidden Gems
While LECO holds a solid position, our research indicates that there are even more deeply undervalued dividend stocks that may present higher potential returns in a shorter timeframe. By tapping into insights from reputable financial sources including Forbes and Morningstar, we’ve carefully curated a list of overlooked dividend stocks poised for growth.
For those interested in maximizing returns, our quarterly newsletter highlights both small-cap and large-cap stock selections tailored to outperform the market, showcasing an impressive 373.4% return since May 2014—an astonishing 218 percentage points ahead of the benchmark.
What’s Next?
As you consider your investment journey, keep Lincoln Electric Holdings on your radar, but also explore our findings on other undervalued dividend stocks. Diversifying your portfolio with a blend of established and emerging dividend payers could yield significant benefits in both the short and long term.
Don’t miss our upcoming articles featuring insights on the 20 Best AI Stocks to Buy Now and the 30 Best Stocks According to Billionaires for further investment opportunities.
Disclosure: This analysis showcases originally published insights from Insider Monkey. Continue to stay informed, and make investment decisions that align with your financial goals.