LENNOX INTERNATIONAL INC (LII) Stock Fundamental Analysis
USA - NYSE:LII - US5261071071 - Common Stock
548.99 USD
+14.24 (+2.66%)
548.94 USD
-0.05 (-0.01%)
Taking everything into account, LII scores 7 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 valied quite expensively at the moment, while 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.
LII had a positive operating cash flow in the past year.
In the past 5 years LII has always been profitable.
LII had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
LII has a better Return On Assets (22.85%) than 100.00% of its industry peers.
LII has a better Return On Equity (92.68%) than 97.56% of its industry peers.
LII has a Return On Invested Capital of 37.71%. This is amongst the best in the industry. LII outperforms 100.00% of its industry peers.
LII had an Average Return On Invested Capital over the past 3 years of 42.17%. This is significantly above the industry average of 12.70%.
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
Looking at the Profit Margin, with a value of 15.41%, LII belongs to the top of the industry, outperforming 82.93% of the companies in the same industry.
LII's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 19.55%, LII is doing good in the industry, outperforming 78.05% 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 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
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 8.44 indicates that LII is not in any danger for bankruptcy at the moment.
LII has a better Altman-Z score (8.44) than 92.68% of its industry peers.
The Debt to FCF ratio of LII is 1.74, which is an excellent value as it means it would take LII, only 1.74 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.74, LII is in the better half of the industry, outperforming 78.05% 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 73.17% of its industry peers.
Although LII does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.96 | ||
| Debt/FCF | 1.74 | ||
| Altman-Z | 8.44 |
ROIC/WACC3.91
WACC9.65%
2.3 Liquidity
A Current Ratio of 1.41 indicates that LII should not have too much problems paying its short term obligations.
With a Current ratio value of 1.41, LII is not doing good in the industry: 73.17% of the companies in the same industry are doing better.
LII has a Quick Ratio of 1.41. This is a bad value and indicates that LII is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.71, LII is doing worse than 87.80% of the companies in the same industry.
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.
The Earnings Per Share has been growing by 15.03% 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 7.92%.
Measured over the past years, LII shows a small growth in Revenue. The Revenue has been growing by 7.01% on average per year.
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
Based on estimates for the next years, LII will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.73% on average per year.
LII is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.49% yearly.
EPS Next Y6.73%
EPS Next 2Y8.18%
EPS Next 3Y8.97%
EPS Next 5Y10.73%
Revenue Next Year3.67%
Revenue Next 2Y5.02%
Revenue Next 3Y5.36%
Revenue Next 5Y8.49%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 23.39 indicates a rather expensive valuation of LII.
LII's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.77, LII is valued at the same level.
With a Price/Forward Earnings ratio of 20.77, LII is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LII is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of LII to the average of the S&P500 Index (23.23), we can say LII is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.39 | ||
| Fwd PE | 20.77 |
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 60.98% 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 | 28.35 | ||
| EV/EBITDA | 17.17 |
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)3.48
PEG (5Y)1.56
EPS Next 2Y8.18%
EPS Next 3Y8.97%
5. Dividend
5.1 Amount
With a yearly dividend of 0.99%, LII is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.25, LII pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, LII's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
5.2 History
The dividend of LII is nicely growing with an annual growth rate of 9.85%!
LII has been paying a dividend for at least 10 years, so it has 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 around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP19.61%
EPS Next 2Y8.18%
EPS Next 3Y8.97%
548.99
+14.24 (+2.66%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners77.77%
Inst Owner Change-0.04%
Ins Owners10.23%
Ins Owner Change-4.68%
Market Cap19.28B
Analysts64.8
Price Target653.52 (19.04%)
Short Float %5.26%
Short Ratio4.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
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)-2.54%
PT rev (3m)11.13%
EPS NQ rev (1m)-3.17%
EPS NQ rev (3m)-0.67%
EPS NY rev (1m)-0.95%
EPS NY rev (3m)3.99%
Revenue NQ rev (1m)-1.47%
Revenue NQ rev (3m)-2.77%
Revenue NY rev (1m)-0.76%
Revenue NY rev (3m)-0.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.39 | ||
| Fwd PE | 20.77 | ||
| P/S | 3.56 | ||
| P/FCF | 28.35 | ||
| P/OCF | 23.08 | ||
| P/B | 21.41 | ||
| P/tB | 28.33 | ||
| EV/EBITDA | 17.17 |
EPS(TTM)23.47
EY4.28%
EPS(NY)26.43
Fwd EY4.81%
FCF(TTM)19.36
FCFY3.53%
OCF(TTM)23.79
OCFY4.33%
SpS154.23
BVpS25.64
TBVpS19.38
PEG (NY)3.48
PEG (5Y)1.56
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 | 8.44 |
F-Score7
WACC9.65%
ROIC/WACC3.91
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 Y6.73%
EPS Next 2Y8.18%
EPS Next 3Y8.97%
EPS Next 5Y10.73%
Revenue 1Y (TTM)7.92%
Revenue growth 3Y8.39%
Revenue growth 5Y7.01%
Sales Q2Q%3.43%
Revenue Next Year3.67%
Revenue Next 2Y5.02%
Revenue Next 3Y5.36%
Revenue Next 5Y8.49%
EBIT growth 1Y20.68%
EBIT growth 3Y21.13%
EBIT growth 5Y16.35%
EBIT Next Year20.54%
EBIT Next 3Y12.58%
EBIT Next 5Y11.18%
FCF growth 1Y142.81%
FCF growth 3Y24.15%
FCF growth 5Y21.91%
OCF growth 1Y99.02%
OCF growth 3Y22.42%
OCF growth 5Y19.01%