TRANE TECHNOLOGIES PLC (TT)
IE00BK9ZQ967 - Common Stock
Overall TT gets a fundamental rating of 6 out of 10. We evaluated TT against 39 industry peers in the Building Products industry. TT scores excellent points on both the profitability and health parts. This is a solid base for a good stock. TT is valied quite expensively at the moment, while it does show a decent growth rate. This makes TT very considerable for quality investing!
1. Profitability
1.1 Basic Checks
TT had positive earnings in the past year.
TT had a positive operating cash flow in the past year.
In the past 5 years TT has always been profitable.
TT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of TT (11.81%) is better than 74.36% of its industry peers.
TT's Return On Equity of 32.51% is amongst the best of the industry. TT outperforms 84.62% of its industry peers.
With an excellent Return On Invested Capital value of 19.33%, TT belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TT is above the industry average of 13.33%.
The last Return On Invested Capital (19.33%) for TT is above the 3 year average (15.41%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.81% | ||
| ROE | 32.51% | ||
| ROIC | 19.33% |
ROA(3y)9.34%
ROA(5y)7.93%
ROE(3y)26.84%
ROE(5y)22.66%
ROIC(3y)15.41%
ROIC(5y)12.99%
1.3 Margins
The Profit Margin of TT (12.73%) is better than 69.23% of its industry peers.
In the last couple of years the Profit Margin of TT has remained more or less at the same level.
TT has a Operating Margin of 17.43%. This is in the better half of the industry: TT outperforms 64.10% of its industry peers.
TT's Operating Margin has improved in the last couple of years.
The Gross Margin of TT (35.28%) is comparable to the rest of the industry.
TT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.43% | ||
| PM (TTM) | 12.73% | ||
| GM | 35.28% |
OM growth 3Y8.22%
OM growth 5Y5.37%
PM growth 3Y18.59%
PM growth 5Y1.1%
GM growth 3Y2.54%
GM growth 5Y1.55%
2. Health
2.1 Basic Checks
TT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for TT has been reduced compared to 1 year ago.
The number of shares outstanding for TT has been reduced compared to 5 years ago.
The debt/assets ratio for TT has been reduced compared to a year ago.
2.2 Solvency
TT has an Altman-Z score of 6.02. This indicates that TT is financially healthy and has little risk of bankruptcy at the moment.
TT has a better Altman-Z score (6.02) than 74.36% of its industry peers.
The Debt to FCF ratio of TT is 1.85, which is an excellent value as it means it would take TT, only 1.85 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.85, TT is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
A Debt/Equity ratio of 0.57 indicates that TT is somewhat dependend on debt financing.
The Debt to Equity ratio of TT (0.57) is comparable to the rest of the industry.
Although TT does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.85 | ||
| Altman-Z | 6.02 |
ROIC/WACC2.75
WACC7.04%
2.3 Liquidity
A Current Ratio of 1.22 indicates that TT should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.22, TT is doing worse than 87.18% of the companies in the same industry.
TT has a Quick Ratio of 1.22. This is a bad value and indicates that TT is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of TT (0.92) is worse than 76.92% of its industry peers.
TT does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 0.92 |
3. Growth
3.1 Past
TT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.91%, which is quite impressive.
TT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.00% yearly.
TT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.89%.
Measured over the past years, TT shows a small growth in Revenue. The Revenue has been growing by 7.45% on average per year.
EPS 1Y (TTM)23.91%
EPS 3Y26.7%
EPS 5Y10%
EPS Q2Q%20.79%
Revenue 1Y (TTM)11.89%
Revenue growth 3Y12.38%
Revenue growth 5Y7.45%
Sales Q2Q%11.43%
3.2 Future
Based on estimates for the next years, TT will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.92% on average per year.
TT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.58% yearly.
EPS Next Y26.63%
EPS Next 2Y20.12%
EPS Next 3Y17.25%
EPS Next 5Y10.92%
Revenue Next Year11.52%
Revenue Next 2Y9.49%
Revenue Next 3Y8.61%
Revenue Next 5Y8.58%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 34.98, the valuation of TT can be described as expensive.
Based on the Price/Earnings ratio, TT is valued a bit more expensive than the industry average as 79.49% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 27.73. TT is valued slightly more expensive when compared to this.
TT is valuated quite expensively with a Price/Forward Earnings ratio of 28.88.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TT indicates a slightly more expensive valuation: TT is more expensive than 71.79% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of TT to the average of the S&P500 Index (22.83), we can say TT is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.98 | ||
| Fwd PE | 28.88 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TT is valued a bit more expensive than the industry average as 79.49% of the companies are valued more cheaply.
TT's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.75 | ||
| EV/EBITDA | 23.38 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
TT has an outstanding profitability rating, which may justify a higher PE ratio.
TT's earnings are expected to grow with 17.25% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.31
PEG (5Y)3.5
EPS Next 2Y20.12%
EPS Next 3Y17.25%
5. Dividend
5.1 Amount
With a yearly dividend of 0.84%, TT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 0.99, TT pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.84, TT pays less dividend than the S&P500 average, which is at 2.24.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.84% |
5.2 History
The dividend of TT is nicely growing with an annual growth rate of 8.94%!
TT has been paying a dividend for at least 10 years, so it has a reliable track record.
TT has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.94%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
TT pays out 29.96% of its income as dividend. This is a sustainable payout ratio.
TT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP29.96%
EPS Next 2Y20.12%
EPS Next 3Y17.25%
TRANE TECHNOLOGIES PLC
NYSE:TT (12/20/2024, 8:04:00 PM)
After market: 377.11 0 (0%)377.11
+0.21 (+0.06%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners84.62%
Inst Owner Change-0.24%
Ins Owners0.48%
Ins Owner Change-0.22%
Market Cap84.86B
Analysts72.35
Price Target429.67 (13.94%)
Short Float %1.18%
Short Ratio2.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.84% |
Dividend Growth(5Y)8.94%
DP29.96%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.28%
Min EPS beat(2)0.7%
Max EPS beat(2)3.86%
EPS beat(4)3
Avg EPS beat(4)4.16%
Min EPS beat(4)-1.23%
Max EPS beat(4)13.3%
EPS beat(8)7
Avg EPS beat(8)3.75%
EPS beat(12)10
Avg EPS beat(12)3.7%
EPS beat(16)12
Avg EPS beat(16)6.5%
Revenue beat(2)1
Avg Revenue beat(2)-0.19%
Min Revenue beat(2)-0.78%
Max Revenue beat(2)0.4%
Revenue beat(4)2
Avg Revenue beat(4)-0.3%
Min Revenue beat(4)-2.94%
Max Revenue beat(4)2.12%
Revenue beat(8)3
Avg Revenue beat(8)-0.67%
Revenue beat(12)5
Avg Revenue beat(12)-0.24%
Revenue beat(16)7
Avg Revenue beat(16)-0.37%
PT rev (1m)7.04%
PT rev (3m)17.93%
EPS NQ rev (1m)0.11%
EPS NQ rev (3m)6.43%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)2.46%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)1.93%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.98 | ||
| Fwd PE | 28.88 | ||
| P/S | 4.38 | ||
| P/FCF | 29.75 | ||
| P/OCF | 26.68 | ||
| P/B | 11.18 | ||
| P/tB | N/A | ||
| EV/EBITDA | 23.38 |
EPS(TTM)10.78
EY2.86%
EPS(NY)13.06
Fwd EY3.46%
FCF(TTM)12.67
FCFY3.36%
OCF(TTM)14.13
OCFY3.75%
SpS86.16
BVpS33.74
TBVpS-8.83
PEG (NY)1.31
PEG (5Y)3.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.81% | ||
| ROE | 32.51% | ||
| ROCE | 23.68% | ||
| ROIC | 19.33% | ||
| ROICexc | 22.35% | ||
| ROICexgc | 99.68% | ||
| OM | 17.43% | ||
| PM (TTM) | 12.73% | ||
| GM | 35.28% | ||
| FCFM | 14.71% |
ROA(3y)9.34%
ROA(5y)7.93%
ROE(3y)26.84%
ROE(5y)22.66%
ROIC(3y)15.41%
ROIC(5y)12.99%
ROICexc(3y)17.33%
ROICexc(5y)14.9%
ROICexgc(3y)80.3%
ROICexgc(5y)67.11%
ROCE(3y)18.87%
ROCE(5y)15.91%
ROICexcg growth 3Y8.05%
ROICexcg growth 5Y16.32%
ROICexc growth 3Y15.65%
ROICexc growth 5Y14.04%
OM growth 3Y8.22%
OM growth 5Y5.37%
PM growth 3Y18.59%
PM growth 5Y1.1%
GM growth 3Y2.54%
GM growth 5Y1.55%
F-Score8
Asset Turnover0.93
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.85 | ||
| Debt/EBITDA | 1.15 | ||
| Cap/Depr | 88.64% | ||
| Cap/Sales | 1.69% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.8% | ||
| Profit Quality | 115.56% | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 0.92 | ||
| Altman-Z | 6.02 |
F-Score8
WACC7.04%
ROIC/WACC2.75
Cap/Depr(3y)83.68%
Cap/Depr(5y)72.93%
Cap/Sales(3y)1.7%
Cap/Sales(5y)1.64%
Profit Quality(3y)89.38%
Profit Quality(5y)107.38%
High Growth Momentum
Growth
EPS 1Y (TTM)23.91%
EPS 3Y26.7%
EPS 5Y10%
EPS Q2Q%20.79%
EPS Next Y26.63%
EPS Next 2Y20.12%
EPS Next 3Y17.25%
EPS Next 5Y10.92%
Revenue 1Y (TTM)11.89%
Revenue growth 3Y12.38%
Revenue growth 5Y7.45%
Sales Q2Q%11.43%
Revenue Next Year11.52%
Revenue Next 2Y9.49%
Revenue Next 3Y8.61%
Revenue Next 5Y8.58%
EBIT growth 1Y21.28%
EBIT growth 3Y21.61%
EBIT growth 5Y13.21%
EBIT Next Year33.16%
EBIT Next 3Y17.22%
EBIT Next 5Y10.32%
FCF growth 1Y229.1%
FCF growth 3Y17.47%
FCF growth 5Y14.92%
OCF growth 1Y171.65%
OCF growth 3Y18.53%
OCF growth 5Y11.16%