CSW vs LII: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of October 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

Reading it: LII is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. CSW and LII share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined CSW and LII exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

CSW Industrials is a diversified industrial company that designs and makes niche products across three segments: Contractor Solutions (roughly 71% of revenue, its largest and highest-margin unit), Specialized Reliability Solutions (about 16%), and Engineered Building Solutions (the remainder). Its products include mechanical parts for heating, ventilation, air conditioning and refrigeration (HVAC/R), plumbing components, grilles/registers/diffusers, building-safety solutions, and high-performance specialty lubricants and sealants. The company sells largely to contractors and industrial end markets, favoring products where it holds strong brand or specification positions rather than commodity exposure.

Full CSW guide

Lennox International designs, manufactures, and distributes heating, ventilation, air conditioning, and refrigeration (HVACR) equipment across North America under the flagship Lennox brand and related labels. The business runs in two segments: Home Comfort Solutions (residential furnaces, air conditioners, heat pumps, and related equipment sold largely through dealers and distributors) and Building Climate Solutions (commercial rooftop units, controls, and refrigeration for light-commercial customers such as retailers, restaurants, and convenience stores). A large share of demand is replacement rather than new construction, which gives the model a more stable, recurring feel than pure cyclicals, and the company has leaned on manufacturing efficiency, direct-to-dealer distribution, and pricing to expand margins over time.

Full LII guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• CSW drivers: Acquisition-led growth engine; Contractor Solutions margin engine.
• LII drivers: Replacement demand and installed base; Regulatory tailwinds and product mix.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Valuation is the most cited risk: CSW trades near 39x trailing and 21x forward earnings (October 2026), a premium well above peers and its own history, so any growth disappointment can compress the stock. For LII, residential demand is the immediate risk: Home Comfort Solutions revenue fell about 7% in the second quarter of 2026, segment profit fell about 12%, and management cut full-year EPS guidance to $23 to $24, which sent the shares down nearly 21% in a day.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick CSW if you believe its drivers more; LII if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the CSW and LII guides.

CSW. CSW trades near 39x trailing earnings, a figure inflated by the fiscal 2026 impairment and interest costs, and about 21x forward earnings on analyst estimates near $12.59 of EPS for fiscal 2027. That premium sits well above building-products peers, and the shares have gone roughly sideways in 2026 as the market weighs acquisition-driven growth against roughly $880 million of net debt. The next report, for the September quarter, is expected around October 29, 2026, with consensus near $3.63 in EPS on about $351 million of revenue.

LII. At about $360 a share, Lennox trades near 16 times trailing earnings and 14 times the 2027 EPS consensus of about $25.80, a sharp de-rating from the mid-20s multiple it carried in mid-2026. The drop came from the July guidance cut and weaker residential volumes rather than a collapse in profitability, since operating margin stayed near 23%. The analyst mean target of about $449 sits above the current price, but the consensus rating has slipped to Hold.

Headline figures (approximate, October 2026): CSW shows revenue (ttm) ~$1.17B, revenue growth (q1 fy2027, yoy) ~33%, q1 fy2027 eps $3.84 vs ~$3.46 consensus; net income ~$50M, margins (ttm gross / operating / net) ~42.5% / ~22.9% / ~10.3%; LII shows revenue (ttm) ~$5.3B, q2 2026 revenue growth (yoy) ~3% (commercial ~+24%, residential ~-7%), operating margin ~23%, net income (ttm) ~$789M.

CSW and LII are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined CSW and LII exposure against your real portfolio. It is not an investment adviser.