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 42 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. These ratings could make LII a good candidate 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.
LII had positive earnings in each of the past 5 years.
Each year in the past 5 years LII had a positive operating cash flow.
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 94.18% is amongst the best of the industry. LII outperforms 97.62% of its industry peers.
LII has a Return On Invested Capital of 38.40%. This is amongst the best in the industry. LII outperforms 100.00% of its industry peers.
LII had an Average Return On Invested Capital over the past 3 years of 42.17%. This is significantly above the industry average of 12.71%.
| 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
LII has a better Profit Margin (14.96%) than 80.95% of its industry peers.
In the last couple of years the Profit Margin of LII has grown nicely.
With a decent Operating Margin value of 19.18%, LII is doing good in the industry, outperforming 78.57% of the companies in the same industry.
LII's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 32.80%, LII is in line with its industry, outperforming 52.38% of the companies in the same industry.
In the last couple of years the Gross Margin of LII has grown nicely.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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.
Compared to 1 year ago, LII has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 8.94 indicates that LII is not in any danger for bankruptcy at the moment.
LII's Altman-Z score of 8.94 is amongst the best of the industry. LII outperforms 95.24% of its industry peers.
The Debt to FCF ratio of LII is 1.49, which is an excellent value as it means it would take LII, only 1.49 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.49, LII belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
LII has a Debt/Equity ratio of 0.98. This is a neutral value indicating LII is somewhat dependend on debt financing.
The Debt to Equity ratio of LII (0.98) is worse than 76.19% 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 | 0.98 | ||
| Debt/FCF | 1.49 | ||
| Altman-Z | 8.94 |
ROIC/WACC2.52
WACC15.22%
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 has a Current ratio of 1.43. This is in the lower half of the industry: LII underperforms 78.57% of its industry peers.
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.
Looking at the Quick ratio, with a value of 0.74, LII is doing worse than 88.10% of the companies in the same industry.
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 | 0.74 |
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.
Measured over the past years, LII shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.03% on average per year.
The Revenue has been growing slightly by 7.78% in the past 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)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
Based on estimates for the next years, LII will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.66% on average per year.
Based on estimates for the next years, LII will show a small growth in Revenue. The Revenue will grow by 7.25% on average per year.
EPS Next Y2.4%
EPS Next 2Y6.03%
EPS Next 3Y7.32%
EPS Next 5Y8.66%
Revenue Next Year4.39%
Revenue Next 2Y4.97%
Revenue Next 3Y5.38%
Revenue Next 5Y7.25%
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
A Price/Earnings ratio of 23.94 indicates a rather expensive valuation of LII.
LII's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.31, LII is valued at the same level.
With a Price/Forward Earnings ratio of 21.20, LII is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as LII.
LII is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.13, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.94 | ||
| Fwd PE | 21.2 |
4.2 Price Multiples
64.29% of the companies in the same industry are cheaper than LII, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as LII.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.69 | ||
| EV/EBITDA | 18.15 |
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.
The excellent profitability rating of LII may justify a higher PE ratio.
PEG (NY)9.99
PEG (5Y)1.59
EPS Next 2Y6.03%
EPS Next 3Y7.32%
5. Dividend
5.1 Amount
LII has a yearly dividend return of 0.95%, which is pretty low.
Compared to an average industry Dividend Yield of 1.20, LII pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, LII's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
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 Years15
Div Non Decr Years25
5.3 Sustainability
LII pays out 20.19% 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.
DP20.19%
EPS Next 2Y6.03%
EPS Next 3Y7.32%
538.09
-12.12 (-2.2%)
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 Change3.3%
Market Cap19.09B
Analysts56.43
Price Target576.23 (7.09%)
Short Float %5.01%
Short Ratio3.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
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)-6.02%
PT rev (3m)-10.24%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.01%
EPS NY rev (1m)-0.6%
EPS NY rev (3m)-0.6%
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 | 23.94 | ||
| Fwd PE | 21.2 | ||
| P/S | 3.56 | ||
| P/FCF | 24.69 | ||
| P/OCF | 20.47 | ||
| P/B | 22.39 | ||
| P/tB | 30.18 | ||
| EV/EBITDA | 18.15 |
EPS(TTM)22.48
EY4.18%
EPS(NY)25.39
Fwd EY4.72%
FCF(TTM)21.79
FCFY4.05%
OCF(TTM)26.29
OCFY4.89%
SpS151.26
BVpS24.03
TBVpS17.83
PEG (NY)9.99
PEG (5Y)1.59
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 | 8.94 |
F-Score8
WACC15.22%
ROIC/WACC2.52
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 Y2.4%
EPS Next 2Y6.03%
EPS Next 3Y7.32%
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%