LENNOX INTERNATIONAL INC (LII) Stock Fundamental Analysis
NYSE:LII - New York Stock Exchange, Inc. - US5261071071 - Common Stock - Currency: USD
LII gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 41 industry peers in the Building Products industry. LII gets an excellent profitability rating and is at the same time showing great financial health properties. LII is quite expensive at the moment. It does show a decent growth rate. This makes LII very considerable for quality investing!
1. Profitability
1.1 Basic Checks
LII had positive earnings in the past year.
LII had a positive operating cash flow in the past year.
Each year in the past 5 years LII has been profitable.
Each year in the past 5 years LII had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 23.24%, LII belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
LII's Return On Equity of 94.18% is amongst the best of the industry. LII outperforms 97.56% of its industry peers.
Looking at the Return On Invested Capital, with a value of 38.40%, LII belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
LII had an Average Return On Invested Capital over the past 3 years of 42.17%. This is significantly above the industry average of 12.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.24% | ||
| ROE | 94.18% | ||
| ROIC | 38.4% |
ROA(3y)21.23%
ROA(5y)20.52%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)42.17%
ROIC(5y)38.23%
1.3 Margins
With an excellent Profit Margin value of 14.96%, LII belongs to the best of the industry, outperforming 80.49% of the companies in the same industry.
LII's Profit Margin has improved in the last couple of years.
The Operating Margin of LII (19.18%) is better than 78.05% of its industry peers.
In the last couple of years the Operating Margin of LII has grown nicely.
LII has a Gross Margin (32.80%) which is in line with its industry peers.
LII's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.18% | ||
| PM (TTM) | 14.96% | ||
| GM | 32.8% |
OM growth 3Y11.75%
OM growth 5Y8.73%
PM growth 3Y10.94%
PM growth 5Y7.07%
GM growth 3Y5.4%
GM growth 5Y3.18%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), LII is creating value.
The number of shares outstanding for LII remains at a similar level compared to 1 year ago.
Compared to 5 years ago, LII has less shares outstanding
The debt/assets ratio for LII has been reduced compared to a year ago.
2.2 Solvency
LII has an Altman-Z score of 9.34. This indicates that LII is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 9.34, LII belongs to the best of the industry, outperforming 95.12% of the companies in the same industry.
LII has a debt to FCF ratio of 1.49. This is a very positive value and a sign of high solvency as it would only need 1.49 years to pay back of all of its debts.
LII has a Debt to FCF ratio of 1.49. This is amongst the best in the industry. LII outperforms 82.93% of its industry peers.
A Debt/Equity ratio of 0.98 indicates that LII is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.98, LII is doing worse than 75.61% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for LII, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 1.49 | ||
| Altman-Z | 9.34 |
ROIC/WACC3.85
WACC9.97%
2.3 Liquidity
LII has a Current Ratio of 1.43. This is a normal value and indicates that LII is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.43, LII is not doing good in the industry: 78.05% of the companies in the same industry are doing better.
LII has a Quick Ratio of 1.43. This is a bad value and indicates that LII is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of LII (0.74) is worse than 87.80% of its industry peers.
The current and quick ratio evaluation for LII is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.43 | ||
| Quick Ratio | 0.74 |
3. Growth
3.1 Past
LII shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.73%, which is quite impressive.
LII shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.03% yearly.
LII shows a small growth in Revenue. In the last year, the Revenue has grown by 7.78%.
LII shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.01% yearly.
EPS 1Y (TTM)20.73%
EPS 3Y21.5%
EPS 5Y15.03%
EPS Q2Q%-2.88%
Revenue 1Y (TTM)7.78%
Revenue growth 3Y8.39%
Revenue growth 5Y7.01%
Sales Q2Q%2.44%
3.2 Future
The Earnings Per Share is expected to grow by 8.66% on average over the next years. This is quite good.
LII is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.25% yearly.
EPS Next Y2.39%
EPS Next 2Y6.03%
EPS Next 3Y7.31%
EPS Next 5Y8.66%
Revenue Next Year4.39%
Revenue Next 2Y4.97%
Revenue Next 3Y5.38%
Revenue Next 5Y7.25%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 26.63, the valuation of LII can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of LII indicates a slightly more expensive valuation: LII is more expensive than 63.41% of the companies listed in the same industry.
LII's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
A Price/Forward Earnings ratio of 23.58 indicates a rather expensive valuation of LII.
Based on the Price/Forward Earnings ratio, LII is valued a bit more expensive than the industry average as 63.41% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.70, LII is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.63 | ||
| Fwd PE | 23.58 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LII indicates a slightly more expensive valuation: LII is more expensive than 73.17% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LII is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.47 | ||
| EV/EBITDA | 19.68 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates LII does not grow enough to justify the current Price/Earnings ratio.
LII has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)11.13
PEG (5Y)1.77
EPS Next 2Y6.03%
EPS Next 3Y7.31%
5. Dividend
5.1 Amount
LII has a yearly dividend return of 0.92%, which is pretty low.
Compared to an average industry Dividend Yield of 1.19, LII pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.92, LII pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.92% |
5.2 History
The dividend of LII is nicely growing with an annual growth rate of 9.85%!
LII has been paying a dividend for at least 10 years, so it has a reliable track record.
LII has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.85%
Div Incr Years15
Div Non Decr Years25
5.3 Sustainability
LII pays out 20.19% of its income as dividend. This is a sustainable payout ratio.
LII's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP20.19%
EPS Next 2Y6.03%
EPS Next 3Y7.31%
598.66
+25.42 (+4.43%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners81.42%
Inst Owner Change4.62%
Ins Owners9.6%
Ins Owner Change3.56%
Market Cap21.24B
Analysts56.43
Price Target576.23 (-3.75%)
Short Float %6.42%
Short Ratio5.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.92% |
Yearly Dividend4.5
Dividend Growth(5Y)9.85%
DP20.19%
Div Incr Years15
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)16.5%
Min EPS beat(2)2%
Max EPS beat(2)31%
EPS beat(4)4
Avg EPS beat(4)11.54%
Min EPS beat(4)2%
Max EPS beat(4)31%
EPS beat(8)8
Avg EPS beat(8)10.92%
EPS beat(12)11
Avg EPS beat(12)9%
EPS beat(16)14
Avg EPS beat(16)8.39%
Revenue beat(2)2
Avg Revenue beat(2)5.72%
Min Revenue beat(2)3.93%
Max Revenue beat(2)7.51%
Revenue beat(4)3
Avg Revenue beat(4)3.38%
Min Revenue beat(4)-2.68%
Max Revenue beat(4)7.51%
Revenue beat(8)6
Avg Revenue beat(8)2.54%
Revenue beat(12)9
Avg Revenue beat(12)1.67%
Revenue beat(16)11
Avg Revenue beat(16)1.28%
PT rev (1m)0.86%
PT rev (3m)-10.24%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.05%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.61%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.78%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.63 | ||
| Fwd PE | 23.58 | ||
| P/S | 3.96 | ||
| P/FCF | 27.47 | ||
| P/OCF | 22.77 | ||
| P/B | 24.92 | ||
| P/tB | 33.58 | ||
| EV/EBITDA | 19.68 |
EPS(TTM)22.48
EY3.76%
EPS(NY)25.39
Fwd EY4.24%
FCF(TTM)21.79
FCFY3.64%
OCF(TTM)26.29
OCFY4.39%
SpS151.26
BVpS24.03
TBVpS17.83
PEG (NY)11.13
PEG (5Y)1.77
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.24% | ||
| ROE | 94.18% | ||
| ROCE | 47.64% | ||
| ROIC | 38.4% | ||
| ROICexc | 42.82% | ||
| ROICexgc | 48.3% | ||
| OM | 19.18% | ||
| PM (TTM) | 14.96% | ||
| GM | 32.8% | ||
| FCFM | 14.41% |
ROA(3y)21.23%
ROA(5y)20.52%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)42.17%
ROIC(5y)38.23%
ROICexc(3y)46.95%
ROICexc(5y)41.92%
ROICexgc(3y)55.8%
ROICexgc(5y)49.64%
ROCE(3y)53.49%
ROCE(5y)48.13%
ROICexcg growth 3Y9.55%
ROICexcg growth 5Y2.53%
ROICexc growth 3Y10.23%
ROICexc growth 5Y4.03%
OM growth 3Y11.75%
OM growth 5Y8.73%
PM growth 3Y10.94%
PM growth 5Y7.07%
GM growth 3Y5.4%
GM growth 5Y3.18%
F-Score8
Asset Turnover1.55
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 1.49 | ||
| Debt/EBITDA | 0.74 | ||
| Cap/Depr | 165.05% | ||
| Cap/Sales | 2.97% | ||
| Interest Coverage | 24.16 | ||
| Cash Conversion | 82.83% | ||
| Profit Quality | 96.29% | ||
| Current Ratio | 1.43 | ||
| Quick Ratio | 0.74 | ||
| Altman-Z | 9.34 |
F-Score8
WACC9.97%
ROIC/WACC3.85
Cap/Depr(3y)197.58%
Cap/Depr(5y)169.68%
Cap/Sales(3y)3.41%
Cap/Sales(5y)2.99%
Profit Quality(3y)73.25%
Profit Quality(5y)91.54%
High Growth Momentum
Growth
EPS 1Y (TTM)20.73%
EPS 3Y21.5%
EPS 5Y15.03%
EPS Q2Q%-2.88%
EPS Next Y2.39%
EPS Next 2Y6.03%
EPS Next 3Y7.31%
EPS Next 5Y8.66%
Revenue 1Y (TTM)7.78%
Revenue growth 3Y8.39%
Revenue growth 5Y7.01%
Sales Q2Q%2.44%
Revenue Next Year4.39%
Revenue Next 2Y4.97%
Revenue Next 3Y5.38%
Revenue Next 5Y7.25%
EBIT growth 1Y23.21%
EBIT growth 3Y21.13%
EBIT growth 5Y16.35%
EBIT Next Year16.05%
EBIT Next 3Y10.98%
EBIT Next 5Y9.25%
FCF growth 1Y266.92%
FCF growth 3Y24.15%
FCF growth 5Y21.91%
OCF growth 1Y190.2%
OCF growth 3Y22.42%
OCF growth 5Y19.01%