Analysis of Lennox Stock After Declaration of Quarterly Dividend

LII shareholders on Dec. 31 will receive dividend payment

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Lennox International Inc. (NYSE:LII) is an American company that provides climate-control solutions globally. The firm offers residential and commercial customers climate control products for the heating, ventilation, air conditioning, and refrigeration markets. The Lennox brand also includes the Heatcraft Refrigeration and Armstrong brands.

On Dec. 10, Lennox International declared a quarterly cash dividend of $0.92 per share of common stock. The dividend is payable on January 14, 2022, to LII stockholders of record as of December 31, 2021. Lennox International offers a forward dividend of $3.68 with a dividend yield of 1.11%.

Lennox stock has increased about 19% in price year-over-year, and recently  broke atop former pressure at the 140-day moving average. The security is testing its footing at this trendline today, while pressure at the $335 level snuffed out a recent rally. Year to date, LII is up 18.5%. 

lii dec 14

From a fundamental point of view, Lennox stock is not the ideal investment at its current valuation. The equity currently trades at a high price-earnings ratio of 245.50. LII also has a rich forward price-earnings ratio of 24.50, indicating that the climate control product company is expected to have very little earnings growth in the coming year despite its best attribute in recent history being the bottom-line growth rate. Lennox has grown its net income 61% since fiscal 2017.

Lennox has also struggled on the top-line, experiencing back-to-back years of annual revenue declines in fiscal 2019 and fiscal 2020, as well as seeing just an 8% increase in revenues since fiscal 2017. In addition, Lennox International holds a very weak balance sheet with $1.17 billion in total debt and just $129 million in cash, further increasing the risk involved for long-term investors considering buying Lennox stock.


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