LENNOX INTERNATIONAL INC (LII) Stock Fundamental Analysis
NYSE:LII - New York Stock Exchange, Inc. - US5261071071 - Common Stock - Currency: USD
Overall LII gets a fundamental rating of 7 out of 10. We evaluated LII against 41 industry peers in the Building Products industry. LII has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. While showing a medium growth rate, LII is valued expensive at the moment. These ratings could make LII a good candidate 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.
Each year in the past 5 years LII had a positive operating cash flow.
1.2 Ratios
The Return On Assets of LII (22.85%) is better than 100.00% of its industry peers.
The Return On Equity of LII (92.68%) is better than 97.56% of its industry peers.
LII has a better Return On Invested Capital (37.71%) 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 13.01%.
The last Return On Invested Capital (37.71%) for LII is well below the 3 year average (42.17%), which needs to be investigated, but indicates that LII had better years and this may not be a problem.
| 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
The Profit Margin of LII (15.41%) is better than 78.05% 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.
With a Gross Margin value of 33.13%, LII perfoms like the industry average, outperforming 53.66% 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 | 19.55% | ||
| 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.
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.
LII has a better debt/assets ratio than last year.
2.2 Solvency
LII has an Altman-Z score of 8.87. This indicates that LII is financially healthy and has little risk of bankruptcy at the moment.
LII has a Altman-Z score of 8.87. This is amongst the best in the industry. LII outperforms 92.68% of its industry peers.
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.
With an excellent Debt to FCF ratio value of 1.74, LII belongs to the best of the industry, outperforming 80.49% of the companies in the same industry.
LII has a Debt/Equity ratio of 0.96. This is a neutral value indicating LII is somewhat dependend on debt financing.
The Debt to Equity ratio of LII (0.96) is worse than 75.61% 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 | 0.96 | ||
| Debt/FCF | 1.74 | ||
| Altman-Z | 8.87 |
ROIC/WACC3.69
WACC10.22%
2.3 Liquidity
LII has a Current Ratio of 1.41. This is a normal value and indicates that LII is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.41, LII is not doing good in the industry: 78.05% of the companies in the same industry are doing better.
A Quick Ratio of 0.71 indicates that LII may have some problems paying its short term obligations.
LII has a Quick ratio of 0.71. This is amonst the worse of the industry: LII underperforms 90.24% of its industry peers.
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.
The Earnings Per Share has been growing by 15.03% on average over the past years. This is quite good.
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 9.46% yearly.
LII is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.31% yearly.
EPS Next Y2.64%
EPS Next 2Y6.19%
EPS Next 3Y7.51%
EPS Next 5Y9.46%
Revenue Next Year4.52%
Revenue Next 2Y5.23%
Revenue Next 3Y5.37%
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
The Price/Earnings ratio is 25.21, which means the current valuation is very expensive for LII.
LII's Price/Earnings ratio is a bit more expensive when compared to the industry. LII is more expensive than 60.98% of the companies in the same industry.
LII is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.84, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 23.24, the valuation of LII can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as LII.
LII is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 35.29, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.21 | ||
| Fwd PE | 23.24 |
4.2 Price Multiples
65.85% of the companies in the same industry are cheaper than LII, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LII is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.55 | ||
| EV/EBITDA | 18.9 |
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)9.57
PEG (5Y)1.68
EPS Next 2Y6.19%
EPS Next 3Y7.51%
5. Dividend
5.1 Amount
With a yearly dividend of 0.87%, LII is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.11, LII pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.87, LII pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.87% |
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 2Y6.19%
EPS Next 3Y7.51%
591.66
-7.5 (-1.25%)
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-1.56%
Market Cap20.78B
Analysts64.8
Price Target674.64 (14.02%)
Short Float %5.88%
Short Ratio4.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.87% |
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)17.08%
PT rev (3m)18.08%
EPS NQ rev (1m)2.23%
EPS NQ rev (3m)1.21%
EPS NY rev (1m)0%
EPS NY rev (3m)0.23%
Revenue NQ rev (1m)-0.94%
Revenue NQ rev (3m)-2.23%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.21 | ||
| Fwd PE | 23.24 | ||
| P/S | 3.84 | ||
| P/FCF | 30.55 | ||
| P/OCF | 24.87 | ||
| P/B | 23.08 | ||
| P/tB | 30.54 | ||
| EV/EBITDA | 18.9 |
EPS(TTM)23.47
EY3.97%
EPS(NY)25.46
Fwd EY4.3%
FCF(TTM)19.36
FCFY3.27%
OCF(TTM)23.79
OCFY4.02%
SpS154.23
BVpS25.64
TBVpS19.38
PEG (NY)9.57
PEG (5Y)1.68
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 | 8.87 |
F-Score7
WACC10.22%
ROIC/WACC3.69
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 Y2.64%
EPS Next 2Y6.19%
EPS Next 3Y7.51%
EPS Next 5Y9.46%
Revenue 1Y (TTM)7.92%
Revenue growth 3Y8.39%
Revenue growth 5Y7.01%
Sales Q2Q%3.43%
Revenue Next Year4.52%
Revenue Next 2Y5.23%
Revenue Next 3Y5.37%
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%