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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Lennox International's Sloan Ratio for the quarter that ended in Jun. 2026 was 12.94%.
As of Jun. 2026, Lennox International has a Sloan Ratio of 12.94%, indicating there is a warning stage of accrual build up.
Lennox International (MIL:1LII) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Jun. 2026, Lennox International has a Sloan Ratio of 12.94%, indicating there is a warning stage of accrual build up.
Lennox International Sloan Ratio % Related Terms
Lennox International Sloan Ratio % Historical Data
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The historical data trend for Lennox International's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
MIL:1LII vs MAIR, MAS, CSL: Sloan Ratio % Comparison
For the Building Products & Equipment subindustry, Lennox International's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Lennox International Sloan Ratio % vs Construction Industry
For the Construction industry and Industrials sector, Lennox International's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Lennox International's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Lennox International's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Lennox International's Net Income for the trailing twelve months (TTM) ended in Jun. 2026 was 209.422 (Sep. 2025 ) + 138.433 (Dec. 2025 ) + 101.378 (Mar. 2026 ) + 233.492 (Jun. 2026 ) = €683 Mil.
Lennox International's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2026 was 256.196 (Sep. 2025 ) + 346.639 (Dec. 2025 ) + 13.926 (Mar. 2026 ) + 149.296 (Jun. 2026 ) = €766 Mil.
Lennox International's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2026 was -30.672 (Sep. 2025 ) + -485.072 (Dec. 2025 ) + -48.959 (Mar. 2026 ) + -29.078 (Jun. 2026 ) = €-594 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Lennox International (MIL:1LII) has a Sloan Ratio % of 12.94% as of Jun. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Lennox International and its competitors.
Is Lennox International's Sloan Ratio % too high?
Lennox International's current Sloan Ratio % is 12.94%. Overall, Lennox International has a GF Score™ of 26/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Lennox International's Sloan Ratio % compare to MAIR and MAS?
Lennox International's Sloan Ratio % of 12.94% can be compared against companies in the Construction industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Construction company?
A good Sloan Ratio % depends on the Construction industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Lennox International and its competitors. Lennox International's current Sloan Ratio % is 12.94%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Lennox International stock overvalued right now?
Based on GuruFocus' analysis, Lennox International (MIL:1LII) is currently considered Significantly Undervalued. The stock's GF Value™ is €520.50, compared to a current price of €361.00 — trading 30.6% below its estimated fair value. The current Sloan Ratio % is 12.94%. Lennox International's overall GF Score™ is 26/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Lennox International (MIL:1LII), the current Sloan Ratio % is 12.94% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Lennox International (MIL:1LII) Overvalued in 2026?
Based on GuruFocus' analysis, Lennox International stock appears to be undervalued.
The current stock price of €361.00 is trading 30.6% below its estimated GF Value™ of €520.50.
GuruFocus considers Lennox International to be Significantly Undervalued.
Key valuation signals for MIL:1LII:
Sloan Ratio %: 12.94%
GF Value™: €520.50 vs. price of €361.00 (30.6% below fair value)
No single metric tells the full story. See the MIL:1LII stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Lennox International manufacturers and distributes heating, ventilating, air conditioning, and refrigeration products for the North American replacement (75% of sales) and new construction (25% of sales) markets. Residential HVAC (home comfort solutions) accounts for 67% of sales and commercial HVAC (building climate solutions) accounts for the remaining 33% of sales. Lennox's commercial exposure is what its peers refer to as residential and light commercial, and lacks the scale and complexity of what is referred to as an applied solution. The company goes to market with multiple brands, but Lennox is its flagship HVAC brand.
26GF Score
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