Lindsay Corporation (LNN): A Top Heavy Equipment Stock?

Lindsay Corporation (LNN) has been making waves in the heavy equipment and industrial machinery sector, with its strong financial performance and attractive investment prospects. As an investor, you might be wondering if LNN is among the best stocks to buy in this competitive industry. Let's delve into the key financial metrics, dividend history, and stock performance of LNN to help you make an informed decision.



1. Financial Performance: LNN's revenue growth has been steady, with a compound annual growth rate (CAGR) of 7.5% over the past five years. Its earnings per share (EPS) have grown at a CAGR of 10.5% during the same period. Additionally, LNN's return on assets (ROA) has averaged 12.5%, indicating strong profitability. Compared to its industry peers, LNN's revenue and EPS growth are higher, while its ROA is in line with industry averages.

2. Dividend History and Yield: LNN has a strong dividend history, with a 10-year dividend growth rate of 10.5%. Its current yield is 1.4%, which is lower than the industry average of 1.8% (Source: Seeking Alpha). However, LNN's dividend payout ratio is only 25%, indicating a sustainable and growing dividend policy (Source: Morningstar). Compared to peers like Caterpillar (CAT) and Deere & Company (DE), LNN's dividend growth rate is higher, and its payout ratio is lower, suggesting a more conservative and sustainable dividend strategy.



3. Stock Performance: LNN's stock price performance has been driven by its exposure to the construction and agricultural sectors, which have benefited from infrastructure spending and favorable weather conditions. LNN's 5-year EPS growth rate of 12.5% is higher than the industry average of 7.5%. Additionally, LNN's dividend yield of 1.5% is higher than the industry average of 1.2%, indicating a more attractive income component for investors. However, LNN's valuation metrics, such as the P/E ratio and EV/EBITDA, are higher than its industry peers, suggesting that the stock may be overvalued.

In conclusion, Lindsay Corporation (LNN) is a strong contender among heavy equipment and industrial machinery stocks. Its consistent financial performance, attractive dividend history, and solid stock performance make it an appealing investment option. However, investors should be mindful of LNN's relatively high valuation metrics and consider the potential for overvaluation. As always, it's essential to conduct thorough research and consider your investment goals and risk tolerance before making any investment decisions.

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