A. O. Smith vs Lennox International

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KIRA’s take AI analyst

I put A. O. Smith and Lennox International side by side, using each one’s latest annual report. Here is what stands out:

Lennox International is the larger business, with $5.2B of revenue in fiscal 2025 against $3.8B for A. O. Smith.
A. O. Smith grew revenue faster (0.3%, against −2.7%).
Lennox International kept more of each dollar of sales as operating profit (20.1% operating margin, against 19.0%).
A. O. Smith turned more of its sales into free cash flow (14.3% FCF margin, against 12.3%).
Lennox International earned a higher return on the capital invested in it (40.1%, against 30.7%).
Investors pay more for each dollar of A. O. Smith’s earnings: a P/E of 17.2x against 16.5x for Lennox International.

Who comes out ahead

Of the 11 measures where higher (or lower) is clearly better, how many each company leads.

A. O. Smith

AOS

6/11

Revenue growthGross marginFCF marginPiotroski F-scoreNet debt / EBITDAShare count change

Lennox International

LII

5/11

5-year growthOperating marginNet marginReturn on capitalReturn on equity

Side by side

Best in the row

Latest fiscal year	AOS FY25	LII FY25
Size
Market cap	$8.6B	$13.0B
Revenue	$3.8B	$5.2B
Free cash flow	$546M	$639M
Net income	$546M	$806M
Growth
Revenue growth	0.3%	−2.7%
5-year growth	5.8%	7.4%
Share count change	−3.5%	−1.1%
Profitability
Gross margin	38.8%	33.4%
Operating margin	19.0%	20.1%
Net margin	14.3%	15.5%
FCF margin	14.3%	12.3%
Return on capital	30.7%	40.1%
Return on equity	29.2%	75.8%
Balance sheet
Net debt	−$38.2M	$1.4B
Net debt / EBITDA	−0.1x	1.2x
Dividends and buybacks	$597M	$655M
Valuation & quality
P/E	17.2x	16.5x
Piotroski F-score	7	5

Ten years

Revenue

FY16

AOS $2.7B

LII $3.6B

FY17

AOS $3.0B

LII $3.8B

FY18

AOS $3.2B

LII $3.9B

FY19

AOS $3.0B

LII $3.8B

FY20

AOS $2.9B

LII $3.6B

FY21

AOS $3.5B

LII $4.2B

FY22

AOS $3.8B

LII $4.7B

FY23

AOS $3.9B

LII $5.0B

FY24

AOS $3.8B

LII $5.3B

FY25

AOS $3.8B

LII $5.2B

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

AOS LII

Operating margin

FY16

AOS 19.2%

LII 11.8%

FY17

AOS 19.3%

LII 12.9%

FY18

AOS 19.2%

LII 13.1%

FY19

AOS 17.7%

LII 17.3%

FY20

AOS 17.4%

LII 13.2%

FY21

AOS 19.3%

LII 14.1%

FY22

AOS 9.6%

LII 13.9%

FY23

AOS 19.4%

LII 15.9%

FY24

AOS 18.5%

LII 19.5%

FY25

AOS 19.0%

LII 20.1%

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

AOS LII

Free cash flow

FY16

AOS $366M

LII $290M

FY17

AOS $232M

LII $227M

FY18

AOS $364M

LII $400M

FY19

AOS $392M

LII $291M

FY20

AOS $505M

LII $534M

FY21

AOS $566M

LII $409M

FY22

AOS $321M

LII $201M

FY23

AOS $598M

LII $486M

FY24

AOS $474M

LII $782M

FY25

AOS $546M

LII $639M

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

AOS LII

Return on capital

FY16

AOS 34.2%

LII 35.8%

FY17

AOS 28.4%

LII 35.5%

FY18

AOS 38.6%

LII 42.9%

FY19

AOS 30.8%

LII 58.6%

FY20

AOS 29.3%

LII 42.8%

FY21

AOS 39.8%

LII 55.4%

FY22

AOS 24.1%

LII 48.3%

FY23

AOS 35.2%

LII 43.8%

FY24

AOS 31.6%

LII 50.9%

FY25

AOS 30.7%

LII 40.1%

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

AOS LII

Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.