Lennox International (NYSE:LII) versus Comfort Systems USA (NYSE:FIX) Head-To-Head Comparison

Lennox International (NYSE:LII) and Comfort Systems USA (NYSE:FIX) are both large-cap construction companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Valuation and Earnings

This table compares Lennox International and Comfort Systems USA”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lennox International	$5.34 billion	3.89	$806.90 million	$23.39	25.27
Comfort Systems USA	$7.03 billion	3.46	$522.43 million	$19.46	35.42

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

Dividends

Lennox International pays an annual dividend of $5.20 per share and has a dividend yield of 0.9%. Comfort Systems USA pays an annual dividend of $2.00 per share and has a dividend yield of 0.3%. Lennox International pays out 22.2% of its earnings in the form of a dividend. Comfort Systems USA pays out 10.3% 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 increased its dividend for 16 consecutive years and Comfort Systems USA has increased its dividend for 13 consecutive years. Lennox International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Lennox International and Comfort Systems USA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lennox International	15.41%	99.81%	24.12%
Comfort Systems USA	9.01%	39.33%	14.76%

Risk & Volatility

Lennox International has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Comfort Systems USA has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Lennox International and Comfort Systems USA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennox International	4	5	4	0	2.00
Comfort Systems USA	0	1	4	1	3.00

Lennox International presently has a consensus price target of $635.3333, indicating a potential upside of 7.47%. Comfort Systems USA has a consensus price target of $635.60, indicating a potential downside of 7.79%. Given Lennox International’s higher probable upside, equities research analysts plainly believe Lennox International is more favorable than Comfort Systems USA.

Institutional and Insider Ownership

67.1% of Lennox International shares are held by institutional investors. Comparatively, 96.5% of Comfort Systems USA shares are held by institutional investors. 9.7% of Lennox International shares are held by company insiders. Comparatively, 1.6% of Comfort Systems USA shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Lennox International beats Comfort Systems USA on 10 of the 17 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 Comfort Systems USA

Comfort Systems USA, Inc., together with its subsidiaries, provides mechanical and electrical installation, renovation, maintenance, repair, and replacement services for the mechanical and electrical services industry in the United States. It operates through two segments, Mechanical and Electrical. The company offers heating, ventilation, and air conditioning systems, as well as plumbing, electrical, piping and controls, off-site construction, monitoring, and fire protection. It also engages in the design, engineering, integration, installation, and start-up of mechanical, electrical, and plumbing (MEP) and related systems in new buildings; and renovation, expansion, maintenance, monitoring, repair, and replacement of MEP systems in existing buildings. In addition, the company provides remote monitoring of power usage, temperature, pressure, humidity and air flow for MEP and other building systems. It serves building owners and developers, general contractors, architects, consulting engineers, and property managers in the commercial, industrial, and institutional MEP markets. Comfort Systems USA, Inc. was founded in 1917 and is headquartered in Houston, Texas.