LENNOX INTERNATIONAL INC (LII) Stock Fundamental Analysis
NYSE:LII - US5261071071 - Common Stock
558.08 USD
-21.16 (-3.65%)
558.08 USD
0 (0%)
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 scores excellent points on both the profitability and health parts. This is a solid base for a good stock. LII is quite expensive at the moment. It does show a decent growth rate. With these ratings, LII could be worth investigating further for quality investing!.
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.
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 22.85%, LII belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
LII has a Return On Equity of 92.68%. This is amongst the best in the industry. LII outperforms 97.56% of its industry peers.
LII has a Return On Invested Capital of 37.71%. This is amongst the best in the industry. LII outperforms 100.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for LII is significantly above the industry average of 12.73%.
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
LII has a Profit Margin of 15.41%. This is amongst the best in the industry. LII outperforms 82.93% of its industry peers.
LII's Profit Margin has improved in the last couple of years.
LII has a Operating Margin of 19.55%. This is in the better half of the industry: LII outperforms 78.05% of its industry peers.
In the last couple of years the Operating Margin of LII has grown nicely.
LII's Gross Margin of 33.13% is in line compared to the rest of the industry. LII outperforms 53.66% of 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
LII has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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.
The debt/assets ratio for LII has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 8.78 indicates that LII is not in any danger for bankruptcy at the moment.
The Altman-Z score of LII (8.78) is better than 95.12% of its industry peers.
The Debt to FCF ratio of LII is 1.74, which is an excellent value as it means it would take LII, only 1.74 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.74, LII is doing good in 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 75.61% of the companies in the same industry.
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 | 0.96 | ||
| Debt/FCF | 1.74 | ||
| Altman-Z | 8.78 |
ROIC/WACC3.68
WACC10.24%
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 worse Current ratio (1.41) than 78.05% of its industry peers.
A Quick Ratio of 0.71 indicates that LII may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.71, LII is doing worse than 90.24% of the companies in the same industry.
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 | 1.41 | ||
| 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.
LII shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.01% yearly.
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.
The Revenue is expected to grow by 7.31% on average over the next years.
EPS Next Y7.75%
EPS Next 2Y8.54%
EPS Next 3Y9%
EPS Next 5Y9.78%
Revenue Next Year4.62%
Revenue Next 2Y5.43%
Revenue Next 3Y5.61%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
LII is valuated rather expensively with a Price/Earnings ratio of 23.78.
Compared to the rest of the industry, the Price/Earnings ratio of LII is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 27.07, LII is valued at the same level.
LII is valuated rather expensively with a Price/Forward Earnings ratio of 20.98.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LII is on the same level as its industry peers.
LII's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.59.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.78 | ||
| Fwd PE | 20.98 |
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 63.41% 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 | 28.82 | ||
| EV/EBITDA | 18.52 |
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)3.07
PEG (5Y)1.58
EPS Next 2Y8.54%
EPS Next 3Y9%
5. Dividend
5.1 Amount
LII has a yearly dividend return of 0.93%, which is pretty low.
Compared to an average industry Dividend Yield of 1.12, LII pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.93, LII pays less dividend than the S&P500 average, which is at 2.46.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
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 2Y8.54%
EPS Next 3Y9%
558.08
-21.16 (-3.65%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners82.34%
Inst Owner Change-1.11%
Ins Owners10.24%
Ins Owner Change-1.8%
Market Cap19.60B
Analysts64.8
Price Target671.76 (20.37%)
Short Float %5.58%
Short Ratio4.69
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
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)14.24%
PT rev (3m)16.58%
EPS NQ rev (1m)0.34%
EPS NQ rev (3m)1.56%
EPS NY rev (1m)4.98%
EPS NY rev (3m)5.23%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.23%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.78 | ||
| Fwd PE | 20.98 | ||
| P/S | 3.62 | ||
| P/FCF | 28.82 | ||
| P/OCF | 23.46 | ||
| P/B | 21.77 | ||
| P/tB | 28.8 | ||
| EV/EBITDA | 18.52 |
EPS(TTM)23.47
EY4.21%
EPS(NY)26.6
Fwd EY4.77%
FCF(TTM)19.36
FCFY3.47%
OCF(TTM)23.79
OCFY4.26%
SpS154.23
BVpS25.64
TBVpS19.38
PEG (NY)3.07
PEG (5Y)1.58
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 | 8.78 |
F-Score7
WACC10.24%
ROIC/WACC3.68
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 Y7.75%
EPS Next 2Y8.54%
EPS Next 3Y9%
EPS Next 5Y9.78%
Revenue 1Y (TTM)7.92%
Revenue growth 3Y8.39%
Revenue growth 5Y7.01%
Sales Q2Q%3.43%
Revenue Next Year4.62%
Revenue Next 2Y5.43%
Revenue Next 3Y5.61%
Revenue Next 5Y7.31%
EBIT growth 1Y20.68%
EBIT growth 3Y21.13%
EBIT growth 5Y16.35%
EBIT Next Year20.64%
EBIT Next 3Y12.34%
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%