LENNOX INTERNATIONAL INC (LII) Stock Fundamental Analysis
USA - NYSE:LII - US5261071071 - Common Stock
529.36 USD
+8.71 (+1.67%)
526.99 USD
-2.37 (-0.45%)
LII gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 41 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. This makes LII very considerable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year LII was profitable.
LII had a positive operating cash flow in the past year.
Each year in the past 5 years LII has been profitable.
LII had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 22.85%, LII belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
LII's Return On Equity of 92.68% is amongst the best of the industry. LII outperforms 97.56% of its industry peers.
The Return On Invested Capital of LII (37.71%) is better than 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LII is significantly above the industry average of 12.76%.
The 3 year average ROIC (42.17%) for LII is well above the current ROIC(37.71%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.85% | ||
| ROE | 92.68% | ||
| ROIC | 37.71% |
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
Looking at the Profit Margin, with a value of 15.41%, LII belongs to the top of the industry, outperforming 82.93% of the companies in the same industry.
In the last couple of years the Profit Margin of LII has grown nicely.
The Operating Margin of LII (19.55%) 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 (33.13%) which is in line with its industry peers.
In the last couple of years the Gross Margin of LII has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.55% | ||
| PM (TTM) | 15.41% | ||
| GM | 33.13% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so LII is creating value.
The number of shares outstanding for LII remains at a similar level compared to 1 year ago.
The number of shares outstanding for LII has been reduced compared to 5 years ago.
LII has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 8.40 indicates that LII is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 8.40, LII belongs to the top of the industry, outperforming 95.12% of the companies in the same industry.
LII has a debt to FCF ratio of 1.74. This is a very positive value and a sign of high solvency as it would only need 1.74 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.74, LII is in the better half of the industry, outperforming 78.05% of the companies in the same industry.
A Debt/Equity ratio of 0.96 indicates that LII is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.96, LII is doing worse than 73.17% 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 | 0.96 | ||
| Debt/FCF | 1.74 | ||
| Altman-Z | 8.4 |
ROIC/WACC3.66
WACC10.3%
2.3 Liquidity
A Current Ratio of 1.41 indicates that LII should not have too much problems paying its short term obligations.
LII has a Current ratio of 1.41. This is in the lower half of the industry: LII underperforms 78.05% of its industry peers.
A Quick Ratio of 0.71 indicates that LII may have some problems paying its short term obligations.
LII's Quick ratio of 0.71 is on the low side compared to the rest of the industry. LII is outperformed by 90.24% 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 | 1.41 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 21.61% over the past year.
LII shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.03% yearly.
Looking at the last year, LII shows a small growth in Revenue. The Revenue has grown by 7.92% in the last year.
Measured over the past years, LII shows a small growth in Revenue. The Revenue has been growing by 7.01% on average per year.
EPS 1Y (TTM)21.61%
EPS 3Y21.5%
EPS 5Y15.03%
EPS Q2Q%14.49%
Revenue 1Y (TTM)7.92%
Revenue growth 3Y8.39%
Revenue growth 5Y7.01%
Sales Q2Q%3.43%
3.2 Future
LII is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.78% yearly.
Based on estimates for the next years, LII will show a small growth in Revenue. The Revenue will grow by 7.31% on average per year.
EPS Next Y6.73%
EPS Next 2Y8.18%
EPS Next 3Y8.97%
EPS Next 5Y9.78%
Revenue Next Year4.46%
Revenue Next 2Y5.36%
Revenue Next 3Y5.53%
Revenue Next 5Y7.31%
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 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 22.55, the valuation of LII can be described as rather expensive.
LII's Price/Earnings ratio is in line with the industry average.
LII's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.76.
With a Price/Forward Earnings ratio of 20.03, LII is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LII is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.18, LII is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.55 | ||
| Fwd PE | 20.03 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LII is valued a bit more expensive than 60.98% 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 | 27.34 | ||
| EV/EBITDA | 17.01 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of LII may justify a higher PE ratio.
PEG (NY)3.35
PEG (5Y)1.5
EPS Next 2Y8.18%
EPS Next 3Y8.97%
5. Dividend
5.1 Amount
LII has a Yearly Dividend Yield of 1.01%. Purely for dividend investing, there may be better candidates out there.
LII's Dividend Yield is a higher than the industry average which is at 1.19.
With a Dividend Yield of 1.01, LII pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
5.2 History
The dividend of LII is nicely growing with an annual growth rate of 9.85%!
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)9.85%
Div Incr Years15
Div Non Decr Years25
5.3 Sustainability
19.61% of the earnings are spent on dividend by LII. This is a low number and sustainable payout ratio.
LII's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP19.61%
EPS Next 2Y8.18%
EPS Next 3Y8.97%
529.36
+8.71 (+1.67%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners77.77%
Inst Owner Change-1.12%
Ins Owners10.23%
Ins Owner Change-4.69%
Market Cap18.59B
Analysts64.8
Price Target670.56 (26.67%)
Short Float %5.26%
Short Ratio4.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
Yearly Dividend4.5
Dividend Growth(5Y)9.85%
DP19.61%
Div Incr Years15
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.46%
Min EPS beat(2)2%
Max EPS beat(2)12.93%
EPS beat(4)4
Avg EPS beat(4)14.05%
Min EPS beat(4)2%
Max EPS beat(4)31%
EPS beat(8)8
Avg EPS beat(8)10.38%
EPS beat(12)11
Avg EPS beat(12)9.74%
EPS beat(16)14
Avg EPS beat(16)9.01%
Revenue beat(2)2
Avg Revenue beat(2)2.3%
Min Revenue beat(2)0.66%
Max Revenue beat(2)3.93%
Revenue beat(4)4
Avg Revenue beat(4)4.22%
Min Revenue beat(4)0.66%
Max Revenue beat(4)7.51%
Revenue beat(8)6
Avg Revenue beat(8)2.39%
Revenue beat(12)9
Avg Revenue beat(12)1.69%
Revenue beat(16)11
Avg Revenue beat(16)1.1%
PT rev (1m)-0.18%
PT rev (3m)16.37%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.89%
EPS NY rev (1m)-0.95%
EPS NY rev (3m)4.24%
Revenue NQ rev (1m)-0.38%
Revenue NQ rev (3m)-1.13%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.55 | ||
| Fwd PE | 20.03 | ||
| P/S | 3.43 | ||
| P/FCF | 27.34 | ||
| P/OCF | 22.25 | ||
| P/B | 20.65 | ||
| P/tB | 27.32 | ||
| EV/EBITDA | 17.01 |
EPS(TTM)23.47
EY4.43%
EPS(NY)26.43
Fwd EY4.99%
FCF(TTM)19.36
FCFY3.66%
OCF(TTM)23.79
OCFY4.49%
SpS154.23
BVpS25.64
TBVpS19.38
PEG (NY)3.35
PEG (5Y)1.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.85% | ||
| ROE | 92.68% | ||
| ROCE | 47.39% | ||
| ROIC | 37.71% | ||
| ROICexc | 38.65% | ||
| ROICexgc | 42.93% | ||
| OM | 19.55% | ||
| PM (TTM) | 15.41% | ||
| GM | 33.13% | ||
| FCFM | 12.56% |
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-Score7
Asset Turnover1.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.96 | ||
| Debt/FCF | 1.74 | ||
| Debt/EBITDA | 0.75 | ||
| Cap/Depr | 158.09% | ||
| Cap/Sales | 2.87% | ||
| Interest Coverage | 27.02 | ||
| Cash Conversion | 72.19% | ||
| Profit Quality | 81.49% | ||
| Current Ratio | 1.41 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 8.4 |
F-Score7
WACC10.3%
ROIC/WACC3.66
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)21.61%
EPS 3Y21.5%
EPS 5Y15.03%
EPS Q2Q%14.49%
EPS Next Y6.73%
EPS Next 2Y8.18%
EPS Next 3Y8.97%
EPS Next 5Y9.78%
Revenue 1Y (TTM)7.92%
Revenue growth 3Y8.39%
Revenue growth 5Y7.01%
Sales Q2Q%3.43%
Revenue Next Year4.46%
Revenue Next 2Y5.36%
Revenue Next 3Y5.53%
Revenue Next 5Y7.31%
EBIT growth 1Y20.68%
EBIT growth 3Y21.13%
EBIT growth 5Y16.35%
EBIT Next Year20.54%
EBIT Next 3Y12.58%
EBIT Next 5Y9.79%
FCF growth 1Y142.81%
FCF growth 3Y24.15%
FCF growth 5Y21.91%
OCF growth 1Y99.02%
OCF growth 3Y22.42%
OCF growth 5Y19.01%