Lennox International Inc (NYSE: LII)

Sector: Industrials Industry: Building Products & Equipment CIK: 0001069202
Market Cap 19.91 Bn
P/B 17.12
P/E 24.71
P/S 3.83
ROIC (Qtr) 30.43
Div Yield % 0.89
Rev 1y % (Qtr) -11.15
Total Debt (Qtr) 1.77 Bn
Debt/Equity (Qtr) 1.52
Add ratio to table...

About

Investment thesis

Bull case

  • Strong operating cash flow of 757.60M provides robust 0.43x coverage of total debt 1.77B, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 757.60M provides strong 26.03x coverage of stock compensation 29.10M, indicating sustainable incentive practices.
  • Operating cash flow of 757.60M provides exceptional 18.52x coverage of interest expenses 40.90M, showing strong debt service capability.
  • Robust free cash flow of 640.20M exceeds capital expenditure of 117.40M by 5.45x, indicating strong organic growth funding capability.
  • Operating cash flow of 757.60M fully covers other non-current liabilities 289.40M by 2.62x, showing strong long-term stability.

Bear case

  • Operating cash flow of 757.60M barely covers its investment activities of (655.60M), with a coverage ratio of -1.16, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 52.70M against inventory of 1.15B, the 0.05 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 757.60M provides thin coverage of dividend payments of (173M) with a -4.38 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 52.70M provide limited coverage of acquisition spending of (545M), which is -0.10x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Tax assets of 12.90M provide limited offset against tax liabilities of 46.40M, which is 0.28x, indicating potential future cash flow pressure from tax obligations.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Building Products & Equipment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TT Trane Technologies plc 104.89 Bn 35.94 4.92 4.62 Bn
2 JCI Johnson Controls International plc 91.64 Bn 26.98 3.82 9.71 Bn
3 CARR CARRIER GLOBAL Corp 56.66 Bn 38.18 2.61 12.25 Bn
4 LII Lennox International Inc 19.91 Bn 24.71 3.83 1.77 Bn
5 CSL Carlisle Companies Inc 17.50 Bn 23.63 3.49 2.88 Bn
6 MAS Masco Corp /De/ 15.94 Bn 19.68 2.11 3.17 Bn
7 OC Owens Corning 13.83 Bn 13.90 1.63 5.61 Bn
8 WMS Advanced Drainage Systems, Inc. 13.26 Bn 28.18 4.44 1.45 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.20 2.00
EV to Cash from Ops. EV/CFO 28.02 13.48
EV to Debt EV to Debt 11.99 10.94
EV to EBIT EV/EBIT 20.45 24.16
EV to EBITDA EV/EBITDA 18.54 -11.14
EV to Free Cash Flow [EV/FCF] EV/FCF 33.15 46.78
EV to Market Cap EV to Market Cap 1.07 1.12
EV to Revenue EV/Rev 4.09 2.81
Price to Book Value [P/B] P/B 17.12 4.24
Price to Earnings [P/E] P/E 24.71 47.40
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 4.66 0.80
Dividend Payout Ratio % Div Payout % (Qtr) 22.10 11.22
Dividend per Basic Share Div per Share (Qtr) 5.05 0.71
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 27.77 10.90
Interest Coverage Int. cover (Qtr) 25.37 111.58
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 27.13 -24.93
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -87.30 61.26
Dividend Growth (1y) % Div 1y % (Qtr) 10.99 1.67
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -0.43 -186.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 1.68 -57.93
EBIT Growth (1y) % EBIT 1y % (Qtr) -0.04 -102.26
EBT Growth (1y) % EBT 1y % (Qtr) -0.26 -299.15
EPS Growth (1y) % EPS 1y % (Qtr) 0.48 -598.34
FCF Growth (1y) % FCF 1y % (Qtr) -18.40 89.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.40 -3.62
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.27 0.88
Cash Payout Ratio Cash Payout (Qtr) 0.20 0.13
Cash Ratio Cash Ratio (Qtr) 0.04 1.57
Current Ratio Curr Ratio (Qtr) 1.60 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 1.52 0.79
Interest Cover Ratio Int Coverage (Qtr) 25.37 111.58
Times Interest Earned Times Interest Earned (Qtr) 25.37 111.58
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 22.10 3.54
EBIT Margin % EBIT Margin % (Qtr) 19.97 1.23
EBT Margin % EBT Margin % (Qtr) 19.19 -1.76
Gross Margin % Gross Margin % (Qtr) 33.40 28.65
Net Profit Margin % Net Margin % (Qtr) 15.50 -3.80