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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Lennox International Inc. (XNYS:LII) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LII
Name:
LENNOX INTERNATIONAL INC. (XNYS:LII)
Sector:
- 123700.00K
Industry:
Specialty Industrial Machinery
CEO:
Mr. Todd Bluedorn
Total Employees:
11,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -20.86% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF LENNOX INTERNATIONAL INC.(LII) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY INDUSTRIAL MACHINERY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
245.9
One Month Price Target:
$247.18
Six Month Price Target :
$253.55
Likely Price in One Year's Time:
Ticker:
$261.2
Likely Trading Range Today Under (Normal Volatility)
$245.07
Price Upper limit ($) :
$246.8
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$235.49
This week:
$222.63
This month :
$199.35
Other Primary facts
Market Cap:
8.86B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
35.43M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
9.48%
-9.11%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$294.22
$272.18
$197.58
$219.62
Medium risk (<10%) entry points
Buy Call
Sell Call
$265.00
Buy Put:
Sell Put:
$260.30
$226.74
$231.50
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LII
Sharpe Ratio:
0.26%
Comparison:
LII, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -86.24% lower than the industry
& is -88.56% lower than the market/S&P 500 average
Average Returns/Yield of
LII
Daily returns:
0.01%
Weekly returns:
0.07%
Monthly returns:
0.28%
Yearly returns:
16.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is -78.97% below industry average
Classification:
LII, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.57
Statistical test of Returns:
LII has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.07%
Weekly Volatility:
4.62%
Monthly Volatility:
9.25%
Yearly Volatility:
32.04%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.25%
Volatility in last five trading days has been 8.99% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.23%
Weekly VaR:
-9.46%
Monthly VaR:
-18.93%
How Much Can the price of
LII
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-65.57%
This translates to price declining to:
$205.13
This translates to price declining to:
$84.66
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
LII is a 33.60% riskier investment compared to the market/S&P 500 & is 14.46% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -24.42% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LII
Beta in relation to market/S&P 500--0.93
Expected beta in 1 year's time:
0.88
Expected beta in 3 year's time:
1.244
Unlevered (debt free) Beta:
-0.362
Beta in relation to Nasdaq (XNAS):
0.598
Beta in relation to all global stocks::
0.445
Beta Comparison & Analysis
Beta of competitors/peers::
0.974
Beta is -4.94% lower than peers
Average Industry Beta:
1.281
Beta is -27.72% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.061
Alpha is -240.65% below industry average alpha yield
Alpha is -387% below the market average
Analysis of Cost of Capital of
LII
Equity cost of capital:
0.095
Equity cost of capital is -20.40% below industry mean WACC
Unlevered (without debt) cost of capital:
-3.71%
Before-tax cost of debt:
1.47%
After-tax cost of debt:
1.16%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.16%
WACC is -91.48% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$120.71
Revenue growth rate per share of (3Y):
-21.24
Annual revenue growth rate is -12.68% below industry average
EPS:
$12.48
Expected Annual growth rate of EPS (3Y):
5.65%
Expected future EPS growth rate is 85.22% higher than the Specialty Industrial Machinery industry
Free cash flow (FCF) per share:
$8.78
Balance sheet equity growth per share: 47.03%
Equity growth rate per share is 335.70% higher than the industry
Debt per share
$49.59
EBITDA per share
$18.60
Valuation Analysis Today of
LII
P/E Ratio:
19.02
P/E Ratio of Competitors/Peers:
19.68
P/E ratio is -3.38% lower than main peers & is -30.88% lower than the industry
Stock price/value with industry average P/E ratio: $343.38
LII is -28.39% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $83.04
Present value of the expected future dividends only: $65.61
P/S (Price to Sales ratio):
2.04
Price to sales ratio is -50.91% below the industry mean
P/B (Price to book value ratio):
-21.24
Price to free cash flow: 27.99
Price to free cash flow ratio is -14.52% lower than the industry
Net income growth rate (3Y):
41.06%
Net income growth rate is 2950.56% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 7.27%
Dividend yeild: 1.55%
Previous Dividend: $1.06
Previous adjusted dividend: $1.06
Previous Dividend: $3.82
Expected next dividend best case: $1.14
Expected next dividend worst case: $0.98
Average dividend payment (long-term): $0.85
Average dividend increase/decrease (growth rate) % per period: 3.47%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 28/09/2022
-
Previous dividend payment date: 15/07/2022
Previous dividend record date: 30/06/2022
-
Dividend History:
2022-06-29--$1.06
2021-12-30--$0.92
2021-06-29--$0.92
2022-03-30--$0.92
2021-09-29--$0.92
2021-03-30--$0.77
Dividend growth rate is -0.49% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-428.30%
Net debt to equity ratio:
-437.15%
Debt to assets ratio:
71.51%
Net debt to assets ratio:
72.99%
Debt-to-asset ratio is 32.53% above industry average
Ability to repay debt:
Interest coverage ratio:
24.49
Interest coverage ratio is 25.51% more than industry average
Looking forward:
Debt growth rate:
22.00%
Annual debt growth is -71% lower than industry average debt growth rate
Debt repayment rate in last quarter: 20.24%
Analysis of Key Statistics
Correlation of price movement with the market:
0.599
Statistical significance of correlation:
LII has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.635
Stock price is -5.64% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.635
Correlation of price movement with Nasdaq (^IXIC):
0.004
Covariance of price movement with the market:
0.004
Kurtosis
2.203
Returns are more concentrated around the mean (platykurtic), compared to a normal distribution
Skewness of returns:
-0.262
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
LII
Gross Profit Margin Ratio:
112%
Operating Profit Margin Ratio:
13.75%
Operating profit margin is -156.79% lower than the industry
Net Profit Margin Ratio:
112%
Effective Tax Rate:
16.97%
Effective tax rate is -9.19% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-112.99%
Return on equity (ROE) is -3462.86% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
18.87%
Return on assets (ROA) is 301.97% higher than the industry
Financial Leverage:
3.5x
Current Ratio:
1.67
Current ratio is -44.64% below industry average
Cash Conversion Cycle (days):
10.7
Cash conversion cycle is -82.67% below industry average
The remaining useful life of property plant & equipment is: 7.7 years
Stock based compensation to net income ratio:
1.01%
In-depth Efficiency Analysis
Revenue generated per employee:
388.8K
Each employee generates -90% less revenue than industry average revenue per employee
EBITDA generated per employee:
59.9K
Each employee generates -92% less EBITDA than industry average revenue per employee
Profit generated per employee:
42.1K
Each employee generates -89% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 11.2K
Each employee generates -122% less free cash flow than industry average revenue per employee
Assets/Capital per employee
92.7K
Each employee generates -122% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
LII
ALLEGION PUBLIC LIMITED COMPANY (XNYS:ALLE)
HUBBELL INCORPORATED (XNYS:HUBB)
PENTAIR PUBLIC LIMITED COMPANY (XNYS:PNR)
WATSCO, INC. (XNYS:WSO)
BOOZ ALLEN HAMILTON HOLDING CORPORATION (XNYS:BAH)
SNAP-ON INCORPORATED (XNYS:SNA)
AECOM (XNYS:ACM)
GFL ENVIRONMENTAL INC. (XNYS:GFL)
THE TORO COMPANY (XNYS:TTC)
Current Analyst Ratings
Strong buy�8%
Buy�8%
Hold�50%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.28B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.08B
1.20B
-
453.50M
608.80M
-
1.50M
610.30M
-
26.90M
73.80M
658.90M
588.20M
463.50M
558.10M
94.70M
463.50M
Statement of Cash Flow
Date:
Period:
18.80M
Differed Income Tax :
- 5300.00K
Stock Based Compensation :
4.70M
Change in Working Capital :
- 202200.00K
Accounts Receivables:
-
Other Working Capital:
27.90M
Other Non-Cash Items:
2.50M
Net Cash Provided by Operating Activities:
- 97900.00K
Investments in PP&E:
- 25800.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
34.30M
5.70M
40.00M
603.00M
678.90M
115.30M
1.44B
730.40M
186.40M
-
-
13.30M
89.60M
1.02B
-
2.46B
457.30M
70.60M
6.40M
-
331.50M
859.40M
1.76B
250.80M
2.01B
-
2.87B
900.00K
2.77B
- 80500.0K
- 3100400.00K
March 31, 2022 at 6:00:00 AM
3.69B
- 410200.00K
2.46B
-
1.83B
1.8B
-
100.00K
- 25700.00K
- 445700.00K
-
- 204900.00K
- 33700.00K
813.40M
129.10M
- 2200.00K
3.30M
34.30M
31.00M
- 97900.00K
- 25800.00K
- 123700.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
LII
2023
2024
2025
2026
2027
$290.82
$308.92
$328.14
$348.57
$370.26