LIILennox International, Inc.

Lennox makes heating and cooling systems — and lives on replacing broken ones rather than on new construction.

An air conditioner fails in a heatwave, and the decision is made within a day: the homeowner takes whatever the installer can bring today. Competition is therefore not for the end customer but for the contractor — for their habits, their training and stock held nearby.

Replacement makes up most of sales and barely depends on the housing cycle: what is broken gets fixed at any mortgage rate. Demand is periodically spurred by changes to refrigerant rules, which force equipment to be replaced early. Risks: a cool summer, copper and steel prices, installer availability. A dividend is paid and buybacks are active.