Is LII a high-quality business?

AlphaMadera's AlphaQuality grade scores Lennox International Inc. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how LII compares to a Buffett-style quality bar.

What is Lennox International Inc.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to LII based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes LII a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

LII - Lennox International Inc.

Price: -- -- | CONSENSUS: Hold DETAILS | PRICE TARGET: $553.45 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Platform & Compounding FCF

AlphaQuality — archetype-weighted quantitative grade

A- 82.6 / 100 composite

Composite Grade

Composite of six pillars weighted for platform & compounding fcf businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 25%

A+ 93.3

5yr Avg ROIC 20.5% 93/100
Operating Margin Trend +1.64 pp/yr 95/100

Capital Efficiency

Weight: 15%

A+ 94.7

5yr Avg ROE 54.1% 100/100
5yr Share-Count CAGR -1.6% 85/100

Growth Quality

Weight: 25%

B+ 75.3

5yr Revenue CAGR 5.5% 62/100
5yr EPS CAGR 15.8% 89/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 20%

B 73.5

5yr FCF Margin 10.1% 70/100
5yr FCF/NI Conversion 0.78x 77/100

Balance Sheet

Weight: 10%

A 87.7

Net Debt / EBITDA 1.82x 73/100
Interest Coverage (EBIT/Int) 24.74x 100/100
Altman Z-Score 7.18 100/100

Stability

Weight: 5%

C 56.6

EPS Volatility (σ/μ) 0.51 29/100
Piotroski F-Score 7 78/100
Negative-Revenue Years (5) 1/5 80/100

4 of 5 gurus held; 2 added; 2 trimmed; 1 full exit.

Holders: 4 -1
Avg Δ position: +40.1%
New buys: 0
Full exits: 1

Cooperman sold -100%
Halvorsen increased +153%
Greenblatt increased +86%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (25%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (25%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (20%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (10%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (5%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.