LENNOX INTERNATIONAL INC (LII) Stock Fundamental Analysis
NYSE:LII - New York Stock Exchange, Inc. - US5261071071 - Common Stock - Currency: USD
Taking everything into account, LII scores 6 out of 10 in our fundamental rating. LII was compared to 40 industry peers in the Building Products industry. Both the health and profitability get an excellent rating, making LII a very profitable company, without any liquidiy or solvency issues. While showing a medium growth rate, LII is valued expensive at the moment.
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.
In the past 5 years LII has always been profitable.
LII had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
LII has a Return On Assets of 23.24%. This is amongst the best in the industry. LII outperforms 100.00% of its industry peers.
LII's Return On Equity of 94.91% is amongst the best of the industry. LII outperforms 100.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 38.80%, LII belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for LII is significantly above the industry average of 13.18%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.24% | ||
| ROE | 94.91% | ||
| ROIC | 38.8% |
ROA(3y)21.23%
ROA(5y)20.52%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)42.02%
ROIC(5y)38.14%
1.3 Margins
LII has a better Profit Margin (15.11%) than 80.00% of its industry peers.
In the last couple of years the Profit Margin of LII has grown nicely.
LII's Operating Margin of 19.45% is fine compared to the rest of the industry. LII outperforms 77.50% of its industry peers.
In the last couple of years the Operating Margin of LII has grown nicely.
LII's Gross Margin of 33.17% is in line compared to the rest of the industry. LII outperforms 47.50% of its industry peers.
LII's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.45% | ||
| PM (TTM) | 15.11% | ||
| GM | 33.17% |
OM growth 3Y11.31%
OM growth 5Y8.47%
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.
LII has about the same amout of shares outstanding than it did 1 year ago.
LII has less shares outstanding than it did 5 years ago.
The debt/assets ratio for LII has been reduced compared to a year ago.
2.2 Solvency
LII has an Altman-Z score of 9.15. This indicates that LII is financially healthy and has little risk of bankruptcy at the moment.
LII has a better Altman-Z score (9.15) than 92.50% of its industry peers.
The Debt to FCF ratio of LII is 1.48, which is an excellent value as it means it would take LII, only 1.48 years of fcf income to pay off all of its debts.
LII's Debt to FCF ratio of 1.48 is fine compared to the rest of the industry. LII outperforms 77.50% of its industry peers.
A Debt/Equity ratio of 0.98 indicates that LII is somewhat dependend on debt financing.
LII has a Debt to Equity ratio of 0.98. This is amonst the worse of the industry: LII underperforms 82.50% of its industry peers.
Although LII does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 1.48 | ||
| Altman-Z | 9.15 |
ROIC/WACC3.63
WACC10.69%
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.
LII's Current ratio of 1.43 is on the low side compared to the rest of the industry. LII is outperformed by 80.00% of its industry peers.
A Quick Ratio of 0.90 indicates that LII may have some problems paying its short term obligations.
LII has a Quick ratio of 0.90. This is in the lower half of the industry: LII underperforms 77.50% of its industry peers.
LII does not score too well on the current and quick ratio evaluation. However, as it has 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 | 0.9 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 25.58% over the past year.
The Earnings Per Share has been growing by 15.03% on average over the past years. This is quite good.
LII shows a small growth in Revenue. In the last year, the Revenue has grown by 7.21%.
The Revenue has been growing slightly by 7.01% on average over the past years.
EPS 1Y (TTM)25.58%
EPS 3Y21.5%
EPS 5Y15.03%
EPS Q2Q%54.27%
Revenue 1Y (TTM)7.21%
Revenue growth 3Y8.39%
Revenue growth 5Y7.01%
Sales Q2Q%16.47%
3.2 Future
LII is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.80% yearly.
LII is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.47% yearly.
EPS Next Y3.88%
EPS Next 2Y7.41%
EPS Next 3Y7.25%
EPS Next 5Y6.8%
Revenue Next Year6.4%
Revenue Next 2Y6.47%
Revenue Next 3Y6.25%
Revenue Next 5Y7.47%
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
The Price/Earnings ratio is 25.61, which means the current valuation is very expensive for LII.
Based on the Price/Earnings ratio, LII is valued a bit more expensive than 65.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.47, LII is valued at the same level.
Based on the Price/Forward Earnings ratio of 24.66, the valuation of LII can be described as rather expensive.
65.00% of the companies in the same industry are cheaper than LII, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of LII to the average of the S&P500 Index (92.74), we can say LII is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.61 | ||
| Fwd PE | 24.66 |
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 65.00% of the companies in the same industry.
LII's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.6 | ||
| EV/EBITDA | 18.94 |
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)6.6
PEG (5Y)1.7
EPS Next 2Y7.41%
EPS Next 3Y7.25%
5. Dividend
5.1 Amount
LII has a yearly dividend return of 0.78%, which is pretty low.
LII's Dividend Yield is a higher than the industry average which is at 1.07.
With a Dividend Yield of 0.78, LII pays less dividend than the S&P500 average, which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.78% |
5.2 History
On average, the dividend of LII grows each year by 9.85%, which is quite nice.
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 Years14
Div Non Decr Years24
5.3 Sustainability
LII pays out 19.87% 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.
DP19.87%
EPS Next 2Y7.41%
EPS Next 3Y7.25%
LENNOX INTERNATIONAL INC
NYSE:LII (2/4/2025, 8:04:00 PM)
After market: 578.37 0 (0%)578.37
-4.56 (-0.78%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners72.26%
Inst Owner Change-2.01%
Ins Owners10.31%
Ins Owner Change-5.82%
Market Cap20.60B
Analysts55
Price Target640.95 (10.82%)
Short Float %4.79%
Short Ratio3.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.78% |
Yearly Dividend4.5
Dividend Growth(5Y)9.85%
DP19.87%
Div Incr Years14
Div Non Decr Years24
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)20.76%
Min EPS beat(2)10.27%
Max EPS beat(2)31.25%
EPS beat(4)4
Avg EPS beat(4)13.3%
Min EPS beat(4)2.91%
Max EPS beat(4)31.25%
EPS beat(8)8
Avg EPS beat(8)12.65%
EPS beat(12)11
Avg EPS beat(12)9.92%
EPS beat(16)14
Avg EPS beat(16)12.72%
Revenue beat(2)2
Avg Revenue beat(2)6.14%
Min Revenue beat(2)4.76%
Max Revenue beat(2)7.51%
Revenue beat(4)2
Avg Revenue beat(4)2.07%
Min Revenue beat(4)-2.68%
Max Revenue beat(4)7.51%
Revenue beat(8)6
Avg Revenue beat(8)2.16%
Revenue beat(12)9
Avg Revenue beat(12)1.66%
Revenue beat(16)11
Avg Revenue beat(16)2.07%
PT rev (1m)-0.23%
PT rev (3m)1.84%
EPS NQ rev (1m)-2.56%
EPS NQ rev (3m)-7.09%
EPS NY rev (1m)-0.63%
EPS NY rev (3m)-0.6%
Revenue NQ rev (1m)-1.69%
Revenue NQ rev (3m)-4.5%
Revenue NY rev (1m)-0.44%
Revenue NY rev (3m)-0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.61 | ||
| Fwd PE | 24.66 | ||
| P/S | 3.86 | ||
| P/FCF | 26.6 | ||
| P/OCF | 21.78 | ||
| P/B | 24.23 | ||
| P/tB | 32.69 | ||
| EV/EBITDA | 18.94 |
EPS(TTM)22.58
EY3.9%
EPS(NY)23.46
Fwd EY4.06%
FCF(TTM)21.74
FCFY3.76%
OCF(TTM)26.55
OCFY4.59%
SpS149.95
BVpS23.87
TBVpS17.69
PEG (NY)6.6
PEG (5Y)1.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.24% | ||
| ROE | 94.91% | ||
| ROCE | 48.13% | ||
| ROIC | 38.8% | ||
| ROICexc | 48.23% | ||
| ROICexgc | 55.23% | ||
| OM | 19.45% | ||
| PM (TTM) | 15.11% | ||
| GM | 33.17% | ||
| FCFM | 14.5% |
ROA(3y)21.23%
ROA(5y)20.52%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)42.02%
ROIC(5y)38.14%
ROICexc(3y)46.75%
ROICexc(5y)41.81%
ROICexgc(3y)55.58%
ROICexgc(5y)49.51%
ROCE(3y)53.3%
ROCE(5y)48.02%
ROICexcg growth 3Y9.12%
ROICexcg growth 5Y2.28%
ROICexc growth 3Y9.79%
ROICexc growth 5Y3.78%
OM growth 3Y11.31%
OM growth 5Y8.47%
PM growth 3Y10.94%
PM growth 5Y7.07%
GM growth 3Y5.4%
GM growth 5Y3.18%
F-Score8
Asset Turnover1.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 1.48 | ||
| Debt/EBITDA | 0.73 | ||
| Cap/Depr | 180.13% | ||
| Cap/Sales | 3.21% | ||
| Interest Coverage | 22.98 | ||
| Cash Conversion | 83.4% | ||
| Profit Quality | 95.97% | ||
| Current Ratio | 1.43 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 9.15 |
F-Score8
WACC10.69%
ROIC/WACC3.63
Cap/Depr(3y)200.28%
Cap/Depr(5y)171.3%
Cap/Sales(3y)3.46%
Cap/Sales(5y)3.02%
Profit Quality(3y)72.94%
Profit Quality(5y)91.35%
High Growth Momentum
Growth
EPS 1Y (TTM)25.58%
EPS 3Y21.5%
EPS 5Y15.03%
EPS Q2Q%54.27%
EPS Next Y3.88%
EPS Next 2Y7.41%
EPS Next 3Y7.25%
EPS Next 5Y6.8%
Revenue 1Y (TTM)7.21%
Revenue growth 3Y8.39%
Revenue growth 5Y7.01%
Sales Q2Q%16.47%
Revenue Next Year6.4%
Revenue Next 2Y6.47%
Revenue Next 3Y6.25%
Revenue Next 5Y7.47%
EBIT growth 1Y28.83%
EBIT growth 3Y20.65%
EBIT growth 5Y16.07%
EBIT Next Year18.26%
EBIT Next 3Y11.55%
EBIT Next 5Y8.45%
FCF growth 1Y59.34%
FCF growth 3Y23.74%
FCF growth 5Y21.66%
OCF growth 1Y28.46%
OCF growth 3Y22.42%
OCF growth 5Y19.01%