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 44 industry peers in the Building Products industry. While LII belongs to the best of the industry regarding profitability, 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.
LII had positive earnings in each of the past 5 years.
In the past 5 years LII always reported a positive cash flow from operatings.
1.2 Ratios
LII has a Return On Assets of 18.68%. This is amongst the best in the industry. LII outperforms 95.45% of its industry peers.
The Return On Equity of LII (338.56%) is better than 100.00% of its industry peers.
LII's Return On Invested Capital of 37.87% is amongst the best of the industry. LII outperforms 97.73% 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 15.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.68% | ||
| ROE | 338.56% | ||
| ROIC | 37.87% |
ROA(3y)19.42%
ROA(5y)19.62%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)40.14%
ROIC(5y)41.91%
1.3 Margins
The Profit Margin of LII (10.97%) is better than 72.73% of its industry peers.
In the last couple of years the Profit Margin of LII has grown nicely.
The Operating Margin of LII (15.39%) is better than 68.18% of its industry peers.
LII's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 30.04%, LII is in line with its industry, outperforming 47.73% of the companies in the same industry.
LII's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.39% | ||
| PM (TTM) | 10.97% | ||
| GM | 30.04% |
OM growth 3Y2.51%
OM growth 5Y2.07%
PM growth 3Y-0.62%
PM growth 5Y5.76%
GM growth 3Y-1.35%
GM growth 5Y-1.46%
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 less shares outstanding than it did 1 year ago.
Compared to 5 years ago, LII has less shares outstanding
The debt/assets ratio for LII has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 7.70 indicates that LII is not in any danger for bankruptcy at the moment.
The Altman-Z score of LII (7.70) is better than 84.09% of its industry peers.
The Debt to FCF ratio of LII is 3.75, which is a good value as it means it would take LII, 3.75 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of LII (3.75) is comparable to the rest of the industry.
A Debt/Equity ratio of 7.03 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 7.03, LII is doing worse than 90.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.03 | ||
| Debt/FCF | 3.75 | ||
| Altman-Z | 7.7 |
ROIC/WACC3.49
WACC10.86%
2.3 Liquidity
LII has a Current Ratio of 1.39. 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 1.39 is on the low side compared to the rest of the industry. LII is outperformed by 86.36% of its industry peers.
A Quick Ratio of 0.79 indicates that LII may have some problems paying its short term obligations.
LII has a worse Quick ratio (0.79) than 90.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.39 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
LII shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.95%, which is quite impressive.
The Earnings Per Share has been growing by 12.15% 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 7.22%.
Measured over the past years, LII shows a small growth in Revenue. The Revenue has been growing by 4.21% on average per year.
EPS 1Y (TTM)22.95%
EPS 3Y7.92%
EPS 5Y12.15%
EPS growth Q2Q30.98%
Revenue 1Y (TTM)7.22%
Revenue growth 3Y7.41%
Revenue growth 5Y4.21%
Revenue growth Q2Q9.75%
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 10.38% on average per year.
LII is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.94% yearly.
EPS Next Y27.57%
EPS Next 2Y18.57%
EPS Next 3Y16.04%
EPS Next 5Y10.38%
Revenue Next Year3.71%
Revenue Next 2Y4.56%
Revenue Next 3Y5.37%
Revenue Next 5Y4.94%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
A Price/Earnings ratio of 25.27 indicates a quite expensive valuation of LII.
Compared to the rest of the industry, the Price/Earnings ratio of LII indicates a slightly more expensive valuation: LII is more expensive than 63.64% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 24.54, LII is valued at the same level.
Based on the Price/Forward Earnings ratio of 21.66, the valuation of LII can be described as rather expensive.
61.36% of the companies in the same industry are cheaper than LII, based on the Price/Forward Earnings ratio.
LII's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.22.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.27 | ||
| Fwd PE | 21.66 |
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 68.18% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, LII is valued a bit more expensive than the industry average as 79.55% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.56 | ||
| EV/EBITDA | 19.36 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
LII has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as LII's earnings are expected to grow with 16.04% in the coming years.
PEG (NY)0.92
PEG (5Y)2.08
EPS Next 2Y18.57%
EPS Next 3Y16.04%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.05%, LII has a reasonable but not impressive dividend return.
LII's Dividend Yield is a higher than the industry average which is at 3.66.
Compared to an average S&P500 Dividend Yield of 2.55, LII's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
5.2 History
The dividend of LII is nicely growing with an annual growth rate of 15.95%!
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)15.95%
Div Incr Years13
Div Non Decr Years19
5.3 Sustainability
LII pays out 28.41% of its income as dividend. This is a sustainable payout ratio.
LII's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP28.41%
EPS Next 2Y18.57%
EPS Next 3Y16.04%
LENNOX INTERNATIONAL INC
NYSE:LII (12/11/2023, 3:54:44 PM)
After market: 429.05 0 (0%)429.05
+8.43 (+2%)
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 Cap15.25B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
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(12)
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EPS beat(16)
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Revenue beat(2)
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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 | 25.27 | ||
| Fwd PE | 21.66 | ||
| 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)0.92
PEG (5Y)2.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.68% | ||
| ROE | 338.56% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 15.39% | ||
| PM (TTM) | 10.97% | ||
| GM | 30.04% | ||
| 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 Turnover1.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.03 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.39 | ||
| Quick Ratio | 0.79 | ||
| 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)
Growth
EPS 1Y (TTM)22.95%
EPS 3Y7.92%
EPS 5Y
EPS growth Q2Q
EPS Next Y27.57%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.22%
Revenue growth 3Y7.41%
Revenue growth 5Y
Revenue growth 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