| Snowflake Score | |
|---|---|
| Valuation | 3/6 |
| Future Growth | 2/6 |
| Past Performance | 1/6 |
| Financial Health | 2/6 |
| Dividends | 5/6 |
LII Stock Overview
Lennox International Inc., together with its subsidiaries, designs, manufactures, and markets a range of products for the heating, ventilation, air conditioning, and refrigeration markets in the United States, Canada, and internationally.
Rewards
Risk Analysis
Lennox International Inc. Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$231.38 |
| 52 Week High | US$334.78 |
| 52 Week Low | US$182.85 |
| Beta | 0.93 |
| 1 Month Change | -4.91% |
| 3 Month Change | 12.00% |
| 1 Year Change | -23.00% |
| 3 Year Change | 0.34% |
| 5 Year Change | 27.56% |
| Change since IPO | 1,134.03% |
Recent News & Updates
Lennox International: Market May Be Fully Valuing The Company At This Time
Summary Lennox has good long-term growth prospects. Lennox's stock may reflect the market's volatility, given that its beta is close to 1. The company has steadily increased its dividend over the past decade. Lennox International (LII) is a pure-play company focused on the heating, ventilation, air conditioning, and refrigeration [HVACR] market. It has good long-term growth prospects, profitability, and financial returns. The market may be fully valuing the company at this time. The stock will reflect any further market volatility and downturn. So, it may be best to wait before buying Lennox. Revenue Turbulence May Soon Come to an End In Q2 FY 2022, Lennox saw its revenue increase by 10% to a record $1.37 billion compared to the same quarter in 2021. In Q1 2022, Lennox’s revenue rose by 9% to $1.01 billion. Over the past few years, Lennox has experienced an uneven growth rate [Exhibit 1]. The company was dealt a blow when a tornado struck and destroyed its factory in Iowa in July 2018, and the COVID pandemic knocked some wind off its sails. The company decided to rebuild the factory and retain jobs. But Lennox is beginning to turn around and has shown good growth in the past few quarters. Exhibit 1: Quarterly Growth Change in Revenue, Gross Profit, and Operating Profit Quarterly Growth Change in Revenue, Gross Profit, and Operating Profit (Seeking Alpha, Author Compilation) This recent increase in revenue growth may be the start of good things for Lennox. However, investors should expect turbulence in revenue growth in the short term due to a sharp fall in new home construction and an increased risk of a recession. Although home builders will be eager to complete the homes they started in the last few quarters. Lennox may also benefit from the recently passed Inflation Reduction Act by the U.S. Congress. The law sets aside $21 billion over ten years for energy-saving improvements to people’s homes. Lennox May Have to Look to Asia to Continue Growing The company generates 95% of its revenue from North America and 5% from Europe [Exhibit 2], and 75% of its sales come from the replacement market. Europe is amid an energy crisis with the soaring gas prices increasing inflation to multi-decade highs and increasing the chances of a recession. The outlook for Europe may be much bleaker than that of the U.S., where the consumer is still going strong. The good and bad news from a geographic perspective is that Lennox has no presence in the fast-growing economies of Asia. The good news is that it presents an opportunity for Lennox to build a company from the ground up and gain strong revenue growth for years to come. The bad news is that Lennox has no brand recognition in Asia, and it will take years to build a brand and a network of sellers in that region. Lennox will have to spend heavily to gain a foothold in Asia. In contrast, Carrier Global (CARR) had $1.3 billion in revenues [13% of total revenues] from Asia for the six months ending June 30, 2022. Exhibit 2: Lennox's Revenue Distribution Lennox's Revenue Distribution (Lennox International Investor Presentation) Profit Margins, Dividends, and Share Buybacks The company has steadily increased its margins over the past decade. The company has averaged a 28.8% gross margin since 2016 [Exhibit 3]. It is an increase of 100 basis points compared to its average since 2012. It had a 12.8% operating margin since 2016, an increase of 150 basis points above its average over the past decade. For 2021, the gross margin stood at 28.34%, above the average of 27.84% since 2012. The company has paid total dividends of $791 million from 2012 until 2021. The dividend yield stands at a paltry 1.73%, slightly higher than the 1.57% dividend yield of the S&P 500 Index (VOO). The risk-free U.S. 10-Year Treasury Note yields 150 basis points more than Lennox with a 3.269% yield. But the company has grown dividends at a double-digit CAGR over the past decade [Exhibit 4]. Exhibit 3: Lennox International Gross Margin, Operating Margin, and Net Income Margin [2012-2021] Lennox International Gross Margin, Operating Margin, and Net Income Margin [2012-2021] (Seeking Alpha)
An Intrinsic Calculation For Lennox International Inc. (NYSE:LII) Suggests It's 37% Undervalued
Does the August share price for Lennox International Inc. ( NYSE:LII ) reflect what it's really worth? Today, we will...
Should You Investigate Lennox International Inc. (NYSE:LII) At US$262?
While Lennox International Inc. ( NYSE:LII ) might not be the most widely known stock at the moment, it saw a...
Shareholder Returns
| LII | US Building | US Market | |
|---|---|---|---|
| 7D | -0.5% | -1.6% | -2.0% |
| 1Y | -23.0% | -23.2% | -20.3% |
Return vs Industry: LII exceeded the US Building industry which returned -25.6% over the past year.
Return vs Market: LII matched the US Market which returned -22.1% over the past year.
Price Volatility
| LII volatility | |
|---|---|
| LII Average Weekly Movement | 4.4% |
| Building Industry Average Movement | 5.2% |
| Market Average Movement | 6.9% |
| 10% most volatile stocks in US Market | 15.8% |
| 10% least volatile stocks in US Market | 2.8% |
Stable Share Price: LII is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: LII's weekly volatility (4%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1895 | 11,000 | Alok Maskara | https://www.lennoxinternational.com |
Lennox International Inc., together with its subsidiaries, designs, manufactures, and markets a range of products for the heating, ventilation, air conditioning, and refrigeration markets in the United States, Canada, and internationally. It operates through three segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. The Residential Heating & Cooling segment provides furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment and accessories, comfort control products, and replacement parts and supplies for residential replacement and new construction markets.
Lennox International Inc. Fundamentals Summary
| LII fundamental statistics | |
|---|---|
| Market Cap | US$8.20b |
| Earnings (TTM) | US$470.60m |
| Revenue (TTM) | US$4.40b |
17.4x
P/E Ratio1.9x
P/S RatioIs LII overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| LII income statement (TTM) | |
|---|---|
| Revenue | US$4.40b |
| Cost of Revenue | US$3.19b |
| Gross Profit | US$1.21b |
| Other Expenses | US$743.40m |
| Earnings | US$470.60m |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 13.28 |
| Gross Margin | 27.56% |
| Net Profit Margin | 10.68% |
| Debt/Equity Ratio | -411.3% |
How did LII perform over the long term?
See historical performance and comparison