Financial Analysis: Apogee Enterprises (NASDAQ:APOG) versus Lennox International (NYSE:LII)

Lennox International (NYSE:LII) and Apogee Enterprises (NASDAQ:APOG) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Profitability

This table compares Lennox International and Apogee Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lennox International	14.61%	66.42%	19.16%
Apogee Enterprises	4.68%	15.20%	6.83%

Earnings and Valuation

This table compares Lennox International and Apogee Enterprises”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lennox International	$5.20 billion	2.50	$805.80 million	$22.12	16.99
Apogee Enterprises	$1.40 billion	0.65	$54.13 million	$3.16	13.81

Lennox International has higher revenue and earnings than Apogee Enterprises. Apogee Enterprises is trading at a lower price-to-earnings ratio than Lennox International, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

67.1% of Lennox International shares are owned by institutional investors. Comparatively, 94.1% of Apogee Enterprises shares are owned by institutional investors. 9.8% of Lennox International shares are owned by company insiders. Comparatively, 2.0% of Apogee Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Lennox International has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Apogee Enterprises has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Lennox International and Apogee Enterprises, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennox International	2	10	4	0	2.12
Apogee Enterprises	0	1	2	1	3.00

Lennox International presently has a consensus price target of $483.46, indicating a potential upside of 28.62%. Apogee Enterprises has a consensus price target of $70.50, indicating a potential upside of 61.59%. Given Apogee Enterprises’ stronger consensus rating and higher probable upside, analysts plainly believe Apogee Enterprises is more favorable than Lennox International.

Dividends

Lennox International pays an annual dividend of $5.44 per share and has a dividend yield of 1.4%. Apogee Enterprises pays an annual dividend of $1.08 per share and has a dividend yield of 2.5%. Lennox International pays out 24.6% of its earnings in the form of a dividend. Apogee Enterprises pays out 34.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lennox International has raised its dividend for 16 consecutive years and Apogee Enterprises has raised its dividend for 14 consecutive years.

Summary

Lennox International beats Apogee Enterprises on 13 of the 18 factors compared between the two stocks.

About Lennox International

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. The Home Comfort Solutions segment provides furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, and replacement parts and supplies; residential heating, ventilation, cooling equipment, and air conditioning; and evaporator coils and unit heaters under Lennox, Dave Lennox Signature Collection, Armstrong Air, Ducane, AirEase, Concord, MagicPak, Advanced Distributor Products, Allied, Elite Series, Merit Series, Comfort Sync, Healthy Climate, iComfort, ComfortSense, and Lennox Stores name. The Building Climate Solutions segment offers unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment, variable refrigerant flow commercial, curb, curb adapters, drop box diffusers, HVAC recycling, and salvage service. This segment also provides condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, and refrigeration rack systems for preserving food and other perishables; and compressor racks and industrial process chillers under the Lennox, Model L, CORE, Enlight, Xion, Energence, Prodigy, Strategos, Raider, Lennox VRF, Lennox National Account Services, Allied Commercial, Elite, AES Industries, Mechanical, and Reclaim, Heatcraft Worldwide and Chandler Refrigeration, Bohn, MAGNA, Larkin, FriguaBohn, IntelliGen, and Interlink brand name. In addition, the company provides small package units, rooftop units, chillers, air handlers, and fan coils. It sells its products and services through direct sales, distributors, and company-owned parts and supplies stores. The company was founded in 1895 and is headquartered in Richardson, Texas.

About Apogee Enterprises

Apogee Enterprises, Inc. provides architectural products and services for enclosing buildings, and glass and acrylic products used for preservation, protection, and enhanced viewing in the United States, Canada, and Brazil. The company operates in four segments: Architectural Framing Systems, Architectural Glass, Architectural Services, and Large-Scale Optical (LSO). The Architectural Framing Systems segment designs, engineers, fabricates, finishes, and installs custom glass and aluminum window, curtainwall, storefront, and entrance systems for the exterior of buildings primarily in the non-residential construction sectors. The Architectural Glass segment provides a range of high-performance glass products for use in windows, curtainwall, storefront, and entrance systems. The Architectural Services segment integrates technical services, project management, and field installation services to design, engineer, fabricate, and install building glass and curtainwall systems. The LSO segment manufactures high-performance glazing products for the custom framing, fine art, and engineered optics markets. The company’s products and services are primarily used in commercial buildings, such as office buildings, hotels, and retail centers; institutional buildings comprising education facilities, health care facilities, and government buildings; transportation facilities, such as airports and transit terminals, as well as multi-family residential buildings. It markets its architectural products and services through direct sales force, independent sales representatives, distributors, and glazing subcontractors and general contractors; and value-added glass and acrylics through retail chains, as well as independent distributors to museums, galleries, and other customers. The company was incorporated in 1949 and is based in Minneapolis, Minnesota.