Reviewing Tecogen (TGEN) and Lennox International (LII)

Tecogen (NASDAQ: TGEN) and Lennox International (NYSE:LII) are both construction companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

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This is a summary of current ratings and price targets for Tecogen and Lennox International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tecogen 0 1 2 0 2.67
Lennox International 1 5 3 0 2.22

Tecogen presently has a consensus price target of $17.33, indicating a potential upside of 468.31%. Lennox International has a consensus price target of $207.88, indicating a potential upside of 0.76%. Given Tecogen’s stronger consensus rating and higher probable upside, analysts clearly believe Tecogen is more favorable than Lennox International.

Dividends

Lennox International pays an annual dividend of $2.04 per share and has a dividend yield of 1.0%. Tecogen does not pay a dividend. Lennox International pays out 25.8% of its earnings in the form of a dividend. Lennox International has raised its dividend for 6 consecutive years.

Institutional & Insider Ownership

10.1% of Tecogen shares are owned by institutional investors. Comparatively, 69.9% of Lennox International shares are owned by institutional investors. 19.5% of Tecogen shares are owned by company insiders. Comparatively, 3.9% of Lennox International shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Tecogen 0.14% 0.17% 0.10%
Lennox International 7.96% 1,465.51% 16.80%

Earnings & Valuation

This table compares Tecogen and Lennox International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tecogen $33.20 million 2.28 $40,000.00 N/A N/A
Lennox International $3.84 billion 2.21 $305.70 million $7.92 26.05

Lennox International has higher revenue and earnings than Tecogen.

Volatility and Risk

Tecogen has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500. Comparatively, Lennox International has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Summary

Lennox International beats Tecogen on 10 of the 15 factors compared between the two stocks.

About Tecogen

Tecogen Inc. designs, manufactures, and sells industrial and commercial cogeneration systems that produce combinations of electricity, hot water, and air conditioning in the United States, the United Kingdom, Mexico, Ireland, and internationally. It offers InVerde 100, InVerde e+, CM-75, and CM-60 cogeneration units that supply electricity and hot water; TECOCHILL branded chillers that provide air-conditioning and hot water; and water heaters under the Ilios brand. The company also provides long-term maintenance contracts, parts sales, and turnkey installation services through a network of nine field service centers in California, the Midwest, and the Northeast. It serves hospitals and nursing homes, schools and universities, health clubs and spas, hotels and motels, office and retail buildings, food and beverage processors, multi-unit residential buildings, laundries, ice rinks, swimming pools, factories, municipal buildings, and military installations. Tecogen Inc. has a research and development agreement with Southwest Research Institute. The company was incorporated in 2000 and is headquartered in Waltham, Massachusetts.

About Lennox International

Lennox International Inc., together with its subsidiaries, provides climate control solutions in the United States, Canada, and internationally. It designs, manufactures, and markets a range of products for the heating, ventilation, air conditioning, and refrigeration markets. The company operates in three segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. The Residential Heating & Cooling segment provides furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, and replacement parts and supplies for residential replacement and new construction markets. The Commercial Heating & Cooling segment offers rooftop units, split system/air handler combinations, small package units, chillers, and fan coils for commercial buildings, shopping malls, other retail and entertainment buildings, institutional, and other field-engineered applications; and variable refrigerant flow commercial products. This segment also engages in the installation and service of commercial heating and cooling equipment. The Refrigeration segment offers condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, display cases, and refrigeration rack systems that helps in preserving food and other perishables in supermarkets, convenience stores, restaurants, warehouses, and distribution centers, as well as for data centers, machine tooling, and other cooling applications; and compressor racks and industrial process chillers. The company sells its products and services through direct sales, distributors, and company-owned parts and supplies stores. Lennox International Inc. was founded in 1895 and is headquartered in Richardson, Texas.

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