Lennox International (LII-N)

HVAC for new and replacement construction. It's a replacement play on aging infrastructure, environmental sensitivity, and increased efficiency. Trending higher since mid-2022. Clear channel of higher highs and higher lows. 14-15% earnings growth rate. Yield is 0.76%.

Likes it and owns it.

Sometimes the simplest businesses can be the best to invest in. HVACR sales to replacement and new construction markets. Replacement sales represent about 75% of sales, 25% for new. Two-thirds from residential. 90% of revenues from US, so not a lot of volatility from foreign markets. Yield is 1%.

Clear channel of higher highs and higher lows. 15-17% EPS growth forecast for the next few years. Extensive brand recognition and distribution networks. Great demand for systems that are efficient and environmentally sensitive. Rising temperatures and increasing urbanization affecting demand positively.

Demand for air conditioning and cooling products continues to increase. Ability to generate profits very strong. Expecting further sales increases going forward. Strong management team that has executed well on capital allocation. Market leader in industrial and consumer segments. Streamlining of European business units will help performance. Green component of company providing eco-friendly options to investors.