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 6 out of 10. We evaluated LII against 41 industry peers in the Building Products industry. LII gets an excellent profitability rating and is at the same time showing great financial health properties. While showing a medium growth rate, LII is valued expensive at the moment. With these ratings, LII could be worth investigating further 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.
LII had a positive operating cash flow in each of the past 5 years.
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.
Looking at the Return On Equity, with a value of 94.18%, LII belongs to the top of the industry, outperforming 97.56% of the companies in the same industry.
LII's Return On Invested Capital of 38.40% is amongst the best of the industry. LII outperforms 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 12.62%.
| 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
Looking at the Profit Margin, with a value of 14.96%, LII belongs to the top of the industry, outperforming 80.49% of the companies in the same industry.
LII's Profit Margin has improved in the last couple of years.
The Operating Margin of LII (19.18%) is better than 78.05% of its industry peers.
LII's Operating Margin has improved in the last couple of years.
LII has a Gross Margin (32.80%) 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 | 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), LII is creating value.
Compared to 1 year ago, LII has about the same amount of shares outstanding.
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 9.39 indicates that LII is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 9.39, LII belongs to the top of the industry, outperforming 95.12% of the companies in the same industry.
LII has a debt to FCF ratio of 1.49. This is a very positive value and a sign of high solvency as it would only need 1.49 years to pay back of all of its debts.
The Debt to FCF ratio of LII (1.49) is better than 82.93% of its industry peers.
LII has a Debt/Equity ratio of 0.98. This is a neutral value indicating LII is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.98, LII is not doing good in the industry: 75.61% of the companies in the same industry are doing better.
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 | 9.39 |
ROIC/WACC3.81
WACC10.07%
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.
With a Current ratio value of 1.43, LII is not doing good in the industry: 78.05% of the companies in the same industry are doing better.
A Quick Ratio of 0.74 indicates that LII may have some problems paying its short term obligations.
The Quick ratio of LII (0.74) is worse than 87.80% 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 | 1.43 | ||
| 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.
LII shows a small growth in Revenue. In the last year, the Revenue has grown by 7.78%.
LII shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.01% yearly.
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
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 Y2.39%
EPS Next 2Y6.03%
EPS Next 3Y7.31%
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 26.88 indicates a quite expensive valuation of LII.
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.
LII is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.45, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 23.80, the valuation of LII can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LII indicates a slightly more expensive valuation: LII is more expensive than 63.41% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of LII to the average of the S&P500 Index (21.90), we can say LII is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.88 | ||
| Fwd PE | 23.8 |
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 70.73% of the companies in the same industry.
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 | 27.73 | ||
| EV/EBITDA | 19.85 |
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)11.23
PEG (5Y)1.79
EPS Next 2Y6.03%
EPS Next 3Y7.31%
5. Dividend
5.1 Amount
LII has a yearly dividend return of 0.92%, which is pretty low.
LII's Dividend Yield is a higher than the industry average which is at 1.19.
Compared to an average S&P500 Dividend Yield of 2.42, LII's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.92% |
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 their dividend for at least 10 years, which is a reliable track record.
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.
LII's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP20.19%
EPS Next 2Y6.03%
EPS Next 3Y7.31%
604.22
+2.12 (+0.35%)
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 Change3.56%
Market Cap21.44B
Analysts56.43
Price Target576.23 (-4.63%)
Short Float %6.42%
Short Ratio5.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.92% |
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)0.86%
PT rev (3m)-10.24%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.05%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.61%
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 | 26.88 | ||
| Fwd PE | 23.8 | ||
| P/S | 3.99 | ||
| P/FCF | 27.73 | ||
| P/OCF | 22.98 | ||
| P/B | 25.15 | ||
| P/tB | 33.89 | ||
| EV/EBITDA | 19.85 |
EPS(TTM)22.48
EY3.72%
EPS(NY)25.39
Fwd EY4.2%
FCF(TTM)21.79
FCFY3.61%
OCF(TTM)26.29
OCFY4.35%
SpS151.26
BVpS24.03
TBVpS17.83
PEG (NY)11.23
PEG (5Y)1.79
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 | 9.39 |
F-Score8
WACC10.07%
ROIC/WACC3.81
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 Y2.39%
EPS Next 2Y6.03%
EPS Next 3Y7.31%
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%