LECO vs ITW

For growth investors, Lincoln Electric Holdings, Inc.

(LECO) is the stronger pick with 5. 5% revenue growth year-over-year, versus 0. 9% for Illinois Tool Works Inc. (ITW). Illinois Tool Works Inc. (ITW) offers the better valuation at 24. 8x trailing P/E (23. 1x forward), making it the more compelling value choice. Analysts rate Lincoln Electric Holdings, Inc. (LECO) a "Hold" — based on 22 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Illinois Tool Works Inc.

(ITW) is the cheapest at 24. 8x versus Lincoln Electric Holdings, Inc. at 29. 5x. On forward P/E, Illinois Tool Works Inc. is actually cheaper at 23. 1x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Lincoln Electric Holdings, Inc. wins at 1. 14x versus Illinois Tool Works Inc. 's 2. 41x — a reasonable growth-adjusted valuation.

Over the past 5 years, Lincoln Electric Holdings, Inc.

(LECO) delivered a total return of +115. 6%, compared to +21. 6% for Illinois Tool Works Inc. (ITW). Over 10 years, the gap is even starker: LECO returned +390. 7% versus ITW's +193. 9%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Illinois Tool Works Inc.

(ITW) is the lower-risk stock at 0. 67β versus Lincoln Electric Holdings, Inc. 's 1. 13β — meaning LECO is approximately 68% more volatile than ITW relative to the S&P 500. On balance sheet safety, Lincoln Electric Holdings, Inc. (LECO) carries a lower debt/equity ratio of 88% versus 3% for Illinois Tool Works Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Lincoln Electric Holdings, Inc.

(LECO) is pulling ahead at 5. 5% versus 0. 9% for Illinois Tool Works Inc. (ITW). On earnings-per-share growth, the picture is similar: Lincoln Electric Holdings, Inc. grew EPS 14. 4% year-over-year, compared to -10. 4% for Illinois Tool Works Inc.. Over a 3-year CAGR, LECO leads at 4. 0% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Illinois Tool Works Inc.

(ITW) is the more profitable company, earning 19. 1% net margin versus 12. 3% for Lincoln Electric Holdings, Inc. — meaning it keeps 19. 1% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: ITW leads at 26. 3% versus 16. 9% for LECO. At the gross margin level — before operating expenses — ITW leads at 44. 1%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Lincoln Electric Holdings, Inc. (LECO) is the more undervalued stock at a PEG of 1. 14x versus Illinois Tool Works Inc. 's 2. 41x. A PEG below 1. 5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, Illinois Tool Works Inc. (ITW) trades at 23. 1x forward P/E versus 25. 4x for Lincoln Electric Holdings, Inc. — 2. 3x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for LECO: 9. 8% to $301. 71.

All stocks in this comparison pay dividends.

Illinois Tool Works Inc. (ITW) offers the highest yield at 2. 3%, versus 1. 1% for Lincoln Electric Holdings, Inc. (LECO).

For long-horizon retirement investors, Illinois Tool Works Inc.

(ITW) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 67), 2. 3% yield, +193. 9% 10Y return). Both have compounded well over 10 years (ITW: +193. 9%, LECO: +390. 7%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Industrials sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.