LENNOX INTERNATIONAL INC (LII)
US5261071071 - Common Stock
Taking everything into account, LII scores 6 out of 10 in our fundamental rating. LII was compared to 39 industry peers in the Building Products industry. While LII has a great profitability rating, there are some minor concerns on its financial health. 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.
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 20.02%, LII belongs to the top of the industry, outperforming 94.87% of the companies in the same industry.
LII has a Return On Equity of 111.72%. This is amongst the best in the industry. LII outperforms 100.00% of its industry peers.
With an excellent Return On Invested Capital value of 31.15%, LII belongs to the best 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 13.67%.
The last Return On Invested Capital (31.15%) for LII is well below the 3 year average (40.80%), which needs to be investigated, but indicates that LII had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.02% | ||
| ROE | 111.72% | ||
| ROIC | 31.15% |
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
With a decent Profit Margin value of 12.85%, LII is doing good in the industry, outperforming 71.79% of the companies in the same industry.
LII's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 17.48%, LII is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
LII's Operating Margin has improved in the last couple of years.
LII has a Gross Margin (32.11%) which is in line with its industry peers.
LII's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.48% | ||
| PM (TTM) | 12.85% | ||
| GM | 32.11% |
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.
The number of shares outstanding for LII has been increased compared to 1 year ago.
LII has less shares outstanding than it did 5 years ago.
The debt/assets ratio for LII is higher compared to a year ago.
2.2 Solvency
LII has an Altman-Z score of 9.23. This indicates that LII is financially healthy and has little risk of bankruptcy at the moment.
LII's Altman-Z score of 9.23 is amongst the best of the industry. LII outperforms 92.31% of its industry peers.
The Debt to FCF ratio of LII is 2.33, which is a good value as it means it would take LII, 2.33 years of fcf income to pay off all of its debts.
LII has a Debt to FCF ratio (2.33) which is in line with its industry peers.
A Debt/Equity ratio of 2.21 is on the high side and indicates that LII has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.21, LII is doing worse than 92.31% 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 | 2.21 | ||
| Debt/FCF | 2.33 | ||
| Altman-Z | 9.23 |
ROIC/WACC3.09
WACC10.09%
2.3 Liquidity
A Current Ratio of 1.60 indicates that LII should not have too much problems paying its short term obligations.
LII's Current ratio of 1.60 is on the low side compared to the rest of the industry. LII is outperformed by 79.49% of its industry peers.
LII has a Quick Ratio of 1.60. This is a bad value and indicates that LII is not financially healthy enough and could expect problems in meeting its short term obligations.
LII's Quick ratio of 0.90 is on the low side compared to the rest of the industry. LII is outperformed by 79.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.6 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
LII shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.85%, which is quite impressive.
LII shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.73% yearly.
The Revenue has been growing slightly by 4.58% in the past year.
The Revenue has been growing slightly by 5.11% on average over the past years.
EPS 1Y (TTM)22.85%
EPS 3Y21.8%
EPS 5Y13.73%
EPS Q2Q%11.06%
Revenue 1Y (TTM)4.58%
Revenue growth 3Y11.09%
Revenue growth 5Y5.11%
Sales Q2Q%2.81%
3.2 Future
The Earnings Per Share is expected to grow by 9.82% on average over the next years. This is quite good.
Based on estimates for the next years, LII will show a small growth in Revenue. The Revenue will grow by 6.59% on average per year.
EPS Next Y14.3%
EPS Next 2Y13.57%
EPS Next 3Y13.02%
EPS Next 5Y9.82%
Revenue Next Year4.24%
Revenue Next 2Y6.16%
Revenue Next 3Y6.47%
Revenue Next 5Y6.59%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
LII is valuated quite expensively with a Price/Earnings ratio of 31.24.
Based on the Price/Earnings ratio, LII is valued a bit more expensive than 74.36% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 31.71. LII is around the same levels.
A Price/Forward Earnings ratio of 26.00 indicates a quite expensive valuation of LII.
66.67% of the companies in the same industry are cheaper than LII, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.81, LII is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.24 | ||
| Fwd PE | 26 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LII is valued a bit more expensive than the industry average as 74.36% of the companies are valued more cheaply.
LII's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. LII is more expensive than 74.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.81 | ||
| EV/EBITDA | 23.2 |
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.
A more expensive valuation may be justified as LII's earnings are expected to grow with 13.02% in the coming years.
PEG (NY)2.19
PEG (5Y)2.28
EPS Next 2Y13.57%
EPS Next 3Y13.02%
5. Dividend
5.1 Amount
With a yearly dividend of 0.76%, LII is not a good candidate for dividend investing.
LII's Dividend Yield is comparable with the industry average which is at 0.92.
Compared to an average S&P500 Dividend Yield of 2.18, LII's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.76% |
5.2 History
The dividend of LII is nicely growing with an annual growth rate of 13.43%!
LII has been paying a dividend for at least 10 years, so it has a reliable track record.
LII has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)13.43%
Div Incr Years14
Div Non Decr Years24
5.3 Sustainability
LII pays out 24.26% 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.
DP24.26%
EPS Next 2Y13.57%
EPS Next 3Y13.02%
LENNOX INTERNATIONAL INC
NYSE:LII (10/21/2024, 4:15:00 PM)
After market: 603.01 0 (0%)603.01
-0.04 (-0.01%)
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 Cap21.49B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.76% |
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(4)
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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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Min 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 | 31.24 | ||
| Fwd PE | 26 | ||
| 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)2.19
PEG (5Y)2.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.02% | ||
| ROE | 111.72% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.48% | ||
| PM (TTM) | 12.85% | ||
| GM | 32.11% | ||
| 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 Turnover1.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.21 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.6 | ||
| Quick Ratio | 0.9 | ||
| 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)22.85%
EPS 3Y21.8%
EPS 5Y
EPS Q2Q%
EPS Next Y14.3%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)4.58%
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