Lennox International (NYSE:LII) vs. Quanex Building Products (NYSE:NX) Financial Contrast

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

Insider & Institutional Ownership

97.5% of Quanex Building Products shares are held by institutional investors. Comparatively, 67.1% of Lennox International shares are held by institutional investors. 1.9% of Quanex Building Products shares are held by company insiders. Comparatively, 9.8% of Lennox International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Quanex Building Products and Lennox International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quanex Building Products	0	2	1	0	2.33
Lennox International	3	11	3	0	2.00

Quanex Building Products currently has a consensus price target of $28.00, suggesting a potential upside of 31.83%. Lennox International has a consensus price target of $444.85, suggesting a potential upside of 28.00%. Given Quanex Building Products’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Quanex Building Products is more favorable than Lennox International.

Earnings & Valuation

This table compares Quanex Building Products and Lennox International”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quanex Building Products	$1.84 billion	0.53	-$250.81 million	$0.99	21.45
Lennox International	$5.45 billion	2.18	$805.80 million	$21.55	16.13

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

Profitability

This table compares Quanex Building Products and Lennox International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quanex Building Products	2.43%	11.61%	4.30%
Lennox International	13.77%	62.34%	17.67%

Dividends

Quanex Building Products pays an annual dividend of $0.32 per share and has a dividend yield of 1.5%. Lennox International pays an annual dividend of $5.44 per share and has a dividend yield of 1.6%. Quanex Building Products pays out 32.3% of its earnings in the form of a dividend. Lennox International pays out 25.2% 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. Lennox International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Quanex Building Products has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Lennox International has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Summary

Lennox International beats Quanex Building Products on 13 of the 17 factors compared between the two stocks.

About Quanex Building Products

Quanex Building Products Corporation is a manufacturer of components used in residential and commercial building products. Its offerings serve window, door, and cabinet makers, with products that include window and door components, screens, hardware, seals and weatherstripping, insulated-glass components, and cabinet doors and related parts. The company sells to manufacturers and other customers in the building-products supply chain. Its operations serve markets in North America and internationally, providing components used in both new construction and renovation projects.

About Lennox International

Lennox International designs, manufactures and markets heating, ventilation, air conditioning and refrigeration equipment. Its products include residential furnaces, air conditioners and heat pumps, as well as commercial climate-control systems and refrigeration equipment. The company serves residential, commercial and refrigeration markets, with operations primarily focused on North America and a presence in other international markets. Its businesses also provide related parts and services, including equipment installation and maintenance through company-owned and independent distribution channels.