LENNOX INTERNATIONAL INC (LII)

US5261071071 - Common Stock

566.5  +5.94 (+1.06%)

Fundamental Rating

5

Overall LII gets a fundamental rating of 5 out of 10. We evaluated LII against 40 industry peers in the Building Products industry. LII scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, LII is valued expensive at the moment.



9

1. Profitability

1.1 Basic Checks

In the past year LII was profitable.
LII had a positive operating cash flow in the past year.
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 20.65%. This is amongst the best in the industry. LII outperforms 100.00% of its industry peers.
LII's Return On Equity of 167.14% is amongst the best of the industry. LII outperforms 100.00% of its industry peers.
With an excellent Return On Invested Capital value of 31.41%, LII belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
LII had an Average Return On Invested Capital over the past 3 years of 40.80%. This is significantly above the industry average of 13.95%.
The 3 year average ROIC (40.80%) for LII is well above the current ROIC(31.41%). The reason for the recent decline needs to be investigated.
Industry RankSector Rank
ROA 20.65%
ROE 167.14%
ROIC 31.41%
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 12.38%, LII is doing good in the industry, outperforming 72.50% of the companies in the same industry.
In the last couple of years the Profit Margin of LII has grown nicely.
With a decent Operating Margin value of 16.78%, LII is doing good in the industry, outperforming 62.50% of the companies in the same industry.
In the last couple of years the Operating Margin of LII has grown nicely.
With a Gross Margin value of 31.75%, LII perfoms like the industry average, outperforming 45.00% of the companies in the same industry.
In the last couple of years the Gross Margin of LII has grown nicely.
Industry RankSector Rank
OM 16.78%
PM (TTM) 12.38%
GM 31.75%
OM growth 3Y6.44%
OM growth 5Y4.73%
PM growth 3Y6.51%
PM growth 5Y5.09%
GM growth 3Y2.77%
GM growth 5Y1.66%

4

2. Health

2.1 Basic Checks

LII has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for LII has been increased compared to 1 year ago.
The number of shares outstanding for LII has been reduced compared to 5 years ago.
Compared to 1 year ago, LII has a worse debt to assets ratio.

2.2 Solvency

An Altman-Z score of 9.04 indicates that LII is not in any danger for bankruptcy at the moment.
LII's Altman-Z score of 9.04 is amongst the best of the industry. LII outperforms 92.50% of its industry peers.
The Debt to FCF ratio of LII is 2.60, which is a good value as it means it would take LII, 2.60 years of fcf income to pay off all of its debts.
LII has a Debt to FCF ratio of 2.60. This is comparable to the rest of the industry: LII outperforms 47.50% of its industry peers.
LII has a Debt/Equity ratio of 3.81. This is a high value indicating a heavy dependency on external financing.
LII has a Debt to Equity ratio of 3.81. This is amonst the worse of the industry: LII underperforms 92.50% of its industry peers.
Industry RankSector Rank
Debt/Equity 3.81
Debt/FCF 2.6
Altman-Z 9.04
ROIC/WACC2.97
WACC10.59%

2.3 Liquidity

A Current Ratio of 1.43 indicates that LII should not have too much problems paying its short term obligations.
The Current ratio of LII (1.43) is worse than 80.00% of its industry peers.
LII has a Quick Ratio of 1.43. 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 has a Quick ratio of 0.68. This is amonst the worse of the industry: LII underperforms 90.00% of its industry peers.
Industry RankSector Rank
Current Ratio 1.43
Quick Ratio 0.68

5

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 27.88% 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 13.73% yearly.
LII shows a small growth in Revenue. In the last year, the Revenue has grown by 4.74%.
The Revenue has been growing slightly by 5.11% on average over the past years.
EPS 1Y (TTM)27.88%
EPS 3Y21.8%
EPS 5Y13.73%
EPS Q2Q%22.61%
Revenue 1Y (TTM)4.74%
Revenue growth 3Y11.09%
Revenue growth 5Y5.11%
Sales Q2Q%-0.22%

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 9.82% on average per year.
LII is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.59% yearly.
EPS Next Y11.96%
EPS Next 2Y12.56%
EPS Next 3Y12.34%
EPS Next 5Y9.82%
Revenue Next Year4.16%
Revenue Next 2Y5.99%
Revenue Next 3Y6.27%
Revenue Next 5Y6.59%

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 accelerating.

2

4. Valuation

4.1 Price/Earnings Ratio

LII is valuated quite expensively with a Price/Earnings ratio of 30.42.
72.50% of the companies in the same industry are cheaper than LII, based on the Price/Earnings ratio.
LII's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 29.08.
LII is valuated rather expensively with a Price/Forward Earnings ratio of 24.87.
Based on the Price/Forward Earnings ratio, LII is valued a bit more expensive than the industry average as 65.00% of the companies are valued more cheaply.
LII's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.74.
Industry RankSector Rank
PE 30.42
Fwd PE 24.87

4.2 Price Multiples

72.50% of the companies in the same industry are cheaper than LII, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, LII is valued a bit more expensive than 77.50% of the companies in the same industry.
Industry RankSector Rank
P/FCF 36.83
EV/EBITDA 22.76

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.
LII's earnings are expected to grow with 12.34% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.54
PEG (5Y)2.22
EPS Next 2Y12.56%
EPS Next 3Y12.34%

5

5. Dividend

5.1 Amount

With a yearly dividend of 0.84%, LII is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.01, LII pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.84, LII pays less dividend than the S&P500 average, which is at 2.29.
Industry RankSector Rank
Dividend Yield 0.84%

5.2 History

On average, the dividend of LII grows each year by 13.43%, 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)13.43%
Div Incr Years14
Div Non Decr Years24

5.3 Sustainability

25.13% 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.
DP25.13%
EPS Next 2Y12.56%
EPS Next 3Y12.34%

LENNOX INTERNATIONAL INC

NYSE:LII (7/23/2024, 12:45:55 PM)

566.5

+5.94 (+1.06%)

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 Cap20.18B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 0.84%
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)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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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 RankSector Rank
PE 30.42
Fwd PE 24.87
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)2.54
PEG (5Y)2.22
Profitability
Industry RankSector Rank
ROA 20.65%
ROE 167.14%
ROCE
ROIC
ROICexc
ROICexgc
OM 16.78%
PM (TTM) 12.38%
GM 31.75%
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 Turnover1.67
Health
Industry RankSector Rank
Debt/Equity 3.81
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.43
Quick Ratio 0.68
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)27.88%
EPS 3Y21.8%
EPS 5Y
EPS Q2Q%
EPS Next Y11.96%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)4.74%
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