Head to Head Review: Lennox International (NYSE:LII) versus Tecnoglass (NYSE:TGLS)

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

Institutional & Insider Ownership

67.1% of Lennox International shares are held by institutional investors. Comparatively, 37.3% of Tecnoglass shares are held by institutional investors. 9.8% of Lennox International shares are held by company insiders. Comparatively, 0.1% of Tecnoglass shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Lennox International and Tecnoglass, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennox International	3	11	3	0	2.00
Tecnoglass	0	2	3	0	2.60

Lennox International currently has a consensus target price of $444.85, suggesting a potential upside of 27.38%. Tecnoglass has a consensus target price of $63.33, suggesting a potential upside of 36.45%. Given Tecnoglass’ stronger consensus rating and higher possible upside, analysts clearly believe Tecnoglass is more favorable than Lennox International.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lennox International	13.77%	62.34%	17.67%
Tecnoglass	9.57%	14.99%	8.21%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lennox International	$5.20 billion	2.30	$805.80 million	$21.55	16.21
Tecnoglass	$983.61 million	2.09	$159.57 million	$2.34	19.84

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

Dividends

Lennox International pays an annual dividend of $5.44 per share and has a dividend yield of 1.6%. Tecnoglass pays an annual dividend of $0.60 per share and has a dividend yield of 1.3%. Lennox International pays out 25.2% of its earnings in the form of a dividend. Tecnoglass pays out 25.6% 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 Tecnoglass has raised its dividend for 4 consecutive years. Lennox International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Lennox International beats Tecnoglass on 12 of the 15 factors compared between the two stocks.

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.

About Tecnoglass

Tecnoglass Inc. manufactures architectural glass, windows and aluminum products for residential and commercial construction. Its offerings include insulated and laminated glass, impact-resistant windows, curtain wall systems, storefronts and other building-envelope products. Founded in 1984, the company is based in Barranquilla, Colombia, where it operates manufacturing facilities. Tecnoglass serves customers in the United States, Colombia and other markets in the Americas, with the U.S. as a major market.