Head to Head Contrast: Comfort Systems USA (NYSE:FIX) and Lennox International (NYSE:LII)

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

Volatility and Risk

Comfort Systems USA has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, Lennox International has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500.

Dividends

Comfort Systems USA pays an annual dividend of $1.80 per share and has a dividend yield of 0.3%. Lennox International pays an annual dividend of $5.20 per share and has a dividend yield of 0.8%. Comfort Systems USA pays out 9.2% of its earnings in the form of a dividend. Lennox International pays out 22.2% 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. Comfort Systems USA has increased its dividend for 13 consecutive years and Lennox International has increased 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.

Profitability

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

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Comfort Systems USA	$7.03 billion	3.53	$522.43 million	$19.46	36.15
Lennox International	$5.34 billion	4.05	$806.90 million	$23.39	26.32

Lennox International has lower revenue, but higher earnings 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.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Comfort Systems USA	0	1	4	0	2.80
Lennox International	4	5	4	0	2.00

Comfort Systems USA presently has a consensus price target of $635.60, suggesting a potential downside of 9.64%. Lennox International has a consensus price target of $635.33, suggesting a potential upside of 3.19%. Given Lennox International’s higher probable upside, analysts plainly believe Lennox International is more favorable than Comfort Systems USA.

Institutional & Insider Ownership

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

Summary

Lennox International beats Comfort Systems USA on 10 of the 16 factors compared between the two stocks.

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.

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.