LENNOX INTERNATIONAL INC (LII)
US5261071071 - Common Stock
Overall LII gets a fundamental rating of 6 out of 10. We evaluated LII against 39 industry peers in the Building Products industry. While LII has a great profitability rating, there are some minor concerns on its financial health. LII is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year LII was profitable.
In the past year LII had a positive cash flow from operations.
LII had positive earnings in each of the past 5 years.
LII had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
LII has a Return On Assets of 22.75%. This is amongst the best in the industry. LII outperforms 100.00% of its industry peers.
LII has a better Return On Equity (99.96%) than 100.00% of its industry peers.
With an excellent Return On Invested Capital value of 39.11%, LII belongs to the best 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 40.80%. This is significantly above the industry average of 13.66%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.75% | ||
| ROE | 99.96% | ||
| ROIC | 39.11% |
ROA(3y)20.6%
ROA(5y)19.89%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)40.8%
ROIC(5y)37.97%
1.3 Margins
LII's Profit Margin of 14.63% is fine compared to the rest of the industry. LII outperforms 79.49% of its industry peers.
In the last couple of years the Profit Margin of LII has grown nicely.
LII has a Operating Margin of 18.87%. This is in the better half of the industry: LII outperforms 71.79% of its industry peers.
In the last couple of years the Operating Margin of LII has grown nicely.
LII's Gross Margin of 32.45% is in line compared to the rest of the industry. LII outperforms 43.59% of its industry peers.
LII's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.87% | ||
| PM (TTM) | 14.63% | ||
| GM | 32.45% |
OM growth 3Y6.44%
OM growth 5Y4.73%
PM growth 3Y6.51%
PM growth 5Y5.09%
GM growth 3Y2.77%
GM growth 5Y1.66%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), LII is creating value.
Compared to 1 year ago, LII has more shares outstanding
Compared to 5 years ago, LII has less shares outstanding
Compared to 1 year ago, LII has a worse debt to assets ratio.
2.2 Solvency
LII has an Altman-Z score of 9.62. This indicates that LII is financially healthy and has little risk of bankruptcy at the moment.
LII has a better Altman-Z score (9.62) than 92.31% of its industry peers.
The Debt to FCF ratio of LII is 1.63, which is an excellent value as it means it would take LII, only 1.63 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.63, LII is doing good in the industry, outperforming 69.23% of the companies in the same industry.
A Debt/Equity ratio of 1.10 is on the high side and indicates that LII has dependencies on debt financing.
LII's Debt to Equity ratio of 1.10 is on the low side compared to the rest of the industry. LII is outperformed by 84.62% of its industry peers.
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 | 1.1 | ||
| Debt/FCF | 1.63 | ||
| Altman-Z | 9.62 |
ROIC/WACC3.79
WACC10.31%
2.3 Liquidity
A Current Ratio of 1.39 indicates that LII should not have too much problems paying its short term obligations.
LII's Current ratio of 1.39 is on the low side compared to the rest of the industry. LII is outperformed by 82.05% of its industry peers.
A Quick Ratio of 0.87 indicates that LII may have some problems paying its short term obligations.
LII has a worse Quick ratio (0.87) than 79.49% 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 | 1.39 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
LII shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.38%, which is quite impressive.
The Earnings Per Share has been growing by 13.73% on average over the past years. This is quite good.
Looking at the last year, LII shows a small growth in Revenue. The Revenue has grown by 4.68% in the last year.
Measured over the past years, LII shows a small growth in Revenue. The Revenue has been growing by 5.11% on average per year.
EPS 1Y (TTM)21.38%
EPS 3Y21.8%
EPS 5Y13.73%
EPS Q2Q%24.39%
Revenue 1Y (TTM)4.68%
Revenue growth 3Y11.09%
Revenue growth 5Y5.11%
Sales Q2Q%9.65%
3.2 Future
The Earnings Per Share is expected to grow by 9.82% on average over the next years. This is quite good.
The Revenue is expected to grow by 6.59% on average over the next years.
EPS Next Y18.28%
EPS Next 2Y14.55%
EPS Next 3Y13.31%
EPS Next 5Y9.82%
Revenue Next Year6.53%
Revenue Next 2Y6.77%
Revenue Next 3Y6.67%
Revenue Next 5Y6.59%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 31.57 indicates a quite expensive valuation of LII.
Based on the Price/Earnings ratio, LII is valued a bit more expensive than the industry average as 71.79% of the companies are valued more cheaply.
When comparing the Price/Earnings ratio of LII to the average of the S&P500 Index (28.96), we can say LII is valued inline with the index average.
The Price/Forward Earnings ratio is 27.58, which means the current valuation is very expensive for LII.
Based on the Price/Forward Earnings ratio, LII is valued a bit more expensive than the industry average as 66.67% of the companies are valued more cheaply.
LII is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.82, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.57 | ||
| Fwd PE | 27.58 |
4.2 Price Multiples
LII's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. LII is more expensive than 76.92% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as LII.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.17 | ||
| EV/EBITDA | 21.73 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of LII may justify a higher PE ratio.
LII's earnings are expected to grow with 13.31% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.73
PEG (5Y)2.3
EPS Next 2Y14.55%
EPS Next 3Y13.31%
5. Dividend
5.1 Amount
LII has a yearly dividend return of 0.74%, which is pretty low.
LII's Dividend Yield is comparable with the industry average which is at 0.94.
With a Dividend Yield of 0.74, LII pays less dividend than the S&P500 average, which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
5.2 History
On average, the dividend of LII grows each year by 13.43%, which is quite nice.
LII has paid a dividend for at least 10 years, which is 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)13.43%
Div Incr Years14
Div Non Decr Years24
5.3 Sustainability
LII pays out 15.83% of its income as dividend. This is a sustainable payout ratio.
The dividend of LII is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP15.83%
EPS Next 2Y14.55%
EPS Next 3Y13.31%
LENNOX INTERNATIONAL INC
NYSE:LII (11/21/2024, 5:05:00 PM)
After market: 650.6 0 (0%)650.6
+25.25 (+4.04%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap23.17B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.57 | ||
| Fwd PE | 27.58 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.73
PEG (5Y)2.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.75% | ||
| ROE | 99.96% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 18.87% | ||
| PM (TTM) | 14.63% | ||
| GM | 32.45% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.55
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.1 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.39 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)21.38%
EPS 3Y21.8%
EPS 5Y
EPS Q2Q%
EPS Next Y18.28%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)4.68%
Revenue growth 3Y11.09%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y