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 41 industry peers in the Building Products industry. Both the health and profitability get an excellent rating, making LII a very profitable company, without any liquidiy or solvency issues. 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
LII had positive earnings in the past year.
In the past year LII had a positive cash flow from operations.
In the past 5 years LII has always been profitable.
Each year in the past 5 years LII had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 22.85%, LII belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
LII has a better Return On Equity (92.68%) than 97.56% of its industry peers.
The Return On Invested Capital of LII (37.71%) is better 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 13.12%.
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
LII has a Profit Margin of 15.41%. This is in the better half of the industry: LII outperforms 78.05% of its industry peers.
In the last couple of years the Profit Margin of LII has grown nicely.
LII's Operating Margin of 19.55% is fine compared to the rest of the industry. LII outperforms 78.05% of its industry peers.
LII's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 33.13%, LII perfoms like the industry average, outperforming 53.66% of the companies in the same industry.
LII's Gross Margin has improved in the last couple of years.
| 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.
The number of shares outstanding for LII remains at a similar level compared to 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 8.93. This indicates that LII is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 8.93, LII belongs to the best of the industry, outperforming 92.68% of the companies in the same industry.
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.
The Debt to FCF ratio of LII (1.74) is better than 78.05% of its industry peers.
A Debt/Equity ratio of 0.96 indicates that LII is somewhat dependend on debt financing.
LII's Debt to Equity ratio of 0.96 is on the low side compared to the rest of the industry. LII is outperformed by 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 | 8.93 |
ROIC/WACC3.68
WACC10.26%
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.
Looking at the Current ratio, with a value of 1.41, LII is doing worse than 78.05% of the companies in the same industry.
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.
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 | 1.41 | ||
| 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.
The Revenue has been growing slightly by 7.92% in the past year.
The Revenue has been growing slightly by 7.01% on average over the past years.
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
The Earnings Per Share is expected to grow by 8.66% 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 7.25% on average per year.
EPS Next Y2.64%
EPS Next 2Y6.19%
EPS Next 3Y7.51%
EPS Next 5Y8.66%
Revenue Next Year4.52%
Revenue Next 2Y5.23%
Revenue Next 3Y5.37%
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.
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 quite expensively with a Price/Earnings ratio of 25.21.
Based on the Price/Earnings ratio, LII is valued a bit more expensive than the industry average as 60.98% of the companies are valued more cheaply.
When comparing the Price/Earnings ratio of LII to the average of the S&P500 Index (26.87), we can say LII is valued inline with the index average.
The Price/Forward Earnings ratio is 23.24, which indicates a rather expensive current valuation of LII.
LII's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.34, LII is valued a bit cheaper.
| 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.
LII's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.55 | ||
| EV/EBITDA | 19.12 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
LII has an outstanding profitability rating, which 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 0.88%, LII is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.14, LII pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.88, LII pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
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
LII pays out 19.61% 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.
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-1.61%
Ins Owners10.24%
Ins Owner Change-1.83%
Market Cap20.78B
Analysts64.8
Price Target674.64 (14.02%)
Short Float %5.88%
Short Ratio4.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
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)-0.37%
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 | 19.12 |
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 | 8.93 |
F-Score7
WACC10.26%
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 Y2.64%
EPS Next 2Y6.19%
EPS Next 3Y7.51%
EPS Next 5Y8.66%
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 5Y7.25%
EBIT growth 1Y20.68%
EBIT growth 3Y21.13%
EBIT growth 5Y16.35%
EBIT Next Year20.64%
EBIT Next 3Y12.34%
EBIT Next 5Y9.25%
FCF growth 1Y142.81%
FCF growth 3Y24.15%
FCF growth 5Y21.91%
OCF growth 1Y99.02%
OCF growth 3Y22.42%
OCF growth 5Y19.01%