NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.
- ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.7%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Building Products industry and the overall market, LENNOX INTERNATIONAL INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- Net operating cash flow has significantly increased by 301.69% to $23.70 million when compared to the same quarter last year. In addition, LENNOX INTERNATIONAL INC has also vastly surpassed the industry average cash flow growth rate of 31.91%.
- LENNOX INTERNATIONAL INC has improved earnings per share by 9.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LENNOX INTERNATIONAL INC reported lower earnings of $1.75 versus $2.11 in the prior year. This year, the market expects an improvement in earnings ($2.54 versus $1.75).
- Even though the current debt-to-equity ratio is 1.07, it is still below the industry average, suggesting that this level of debt is acceptable within the Building Products industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.86 is weak.
Lennox International Inc., through its subsidiaries, engages in the design, manufacture, and market of climate control products for the heating, ventilation, air conditioning, and refrigeration markets in the United States, Canada, and internationally. The company has a P/E ratio of 24.7, below the average industrial industry P/E ratio of 26.6 and above the S&P 500 P/E ratio of 17.7. Lennox International has a market cap of $2.27 billion and is part of the
industry. Shares are up 24.6% year to date as of the close of trading on Thursday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.