TRANE TECHNOLOGIES PLC (TT) Stock Fundamental Analysis
NYSE:TT - New York Stock Exchange, Inc. - IE00BK9ZQ967 - Common Stock
Taking everything into account, TT scores 6 out of 10 in our fundamental rating. TT was compared to 41 industry peers in the Building Products industry. Both the health and profitability get an excellent rating, making TT a very profitable company, without any liquidiy or solvency issues. TT is quite expensive at the moment. It does show a decent growth rate. These ratings would make TT suitable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year TT was profitable.
In the past year TT had a positive cash flow from operations.
TT had positive earnings in each of the past 5 years.
In the past 5 years TT always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 11.81%, TT is doing good in the industry, outperforming 75.00% of the companies in the same industry.
TT has a better Return On Equity (32.51%) than 85.00% of its industry peers.
TT has a better Return On Invested Capital (19.33%) than 85.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TT is above the industry average of 13.18%.
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
With a decent Profit Margin value of 12.73%, TT is doing good in the industry, outperforming 70.00% of the companies in the same industry.
In the last couple of years the Profit Margin of TT has remained more or less at the same level.
TT has a better Operating Margin (17.43%) than 65.00% 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.
In the last couple of years the Gross Margin of TT has grown nicely.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so TT is creating value.
The number of shares outstanding for TT has been reduced compared to 1 year ago.
Compared to 5 years ago, TT has less shares outstanding
The debt/assets ratio for TT has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 6.22 indicates that TT is not in any danger for bankruptcy at the moment.
The Altman-Z score of TT (6.22) is better than 72.50% of its industry peers.
TT has a debt to FCF ratio of 1.85. This is a very positive value and a sign of high solvency as it would only need 1.85 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 1.85, TT is doing good in the industry, outperforming 67.50% of the companies in the same industry.
A Debt/Equity ratio of 0.57 indicates that TT is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.57, TT is in line with its industry, outperforming 50.00% of the companies in the same 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 | 6.22 |
ROIC/WACC2.78
WACC6.95%
2.3 Liquidity
TT has a Current Ratio of 1.22. This is a normal value and indicates that TT is financially healthy and should not expect problems in meeting its short term obligations.
TT has a worse Current ratio (1.22) than 87.50% of its industry peers.
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 77.50% 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
The Earnings Per Share has grown by an impressive 23.91% over the past year.
TT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.00% yearly.
Looking at the last year, TT shows a quite strong growth in Revenue. The Revenue has grown by 11.89% in the last year.
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
The Earnings Per Share is expected to grow by 10.92% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.58% on average over the next years. This is quite good.
EPS Next Y26.72%
EPS Next 2Y20.25%
EPS Next 3Y17.41%
EPS Next 5Y10.92%
Revenue Next Year11.52%
Revenue Next 2Y9.57%
Revenue Next 3Y8.74%
Revenue Next 5Y8.58%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
TT is valuated quite expensively with a Price/Earnings ratio of 36.84.
77.50% of the companies in the same industry are cheaper than TT, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.29. TT is valued slightly more expensive when compared to this.
TT is valuated quite expensively with a Price/Forward Earnings ratio of 30.35.
Based on the Price/Forward Earnings ratio, TT is valued a bit more expensive than 70.00% of the companies in the same industry.
TT is valuated rather expensively when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.84 | ||
| Fwd PE | 30.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TT is valued a bit more expensive than 77.50% of the companies in the same industry.
60.00% of the companies in the same industry are cheaper than TT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.33 | ||
| EV/EBITDA | 24.59 |
4.3 Compensation for Growth
TT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of TT may justify a higher PE ratio.
A more expensive valuation may be justified as TT's earnings are expected to grow with 17.41% in the coming years.
PEG (NY)1.38
PEG (5Y)3.69
EPS Next 2Y20.25%
EPS Next 3Y17.41%
5. Dividend
5.1 Amount
TT has a yearly dividend return of 0.86%, which is pretty low.
Compared to an average industry Dividend Yield of 1.05, TT pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.28, TT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
5.2 History
On average, the dividend of TT grows each year by 8.94%, which is quite nice.
TT has been paying a dividend for at least 10 years, so it has a reliable track record.
TT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.94%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
29.96% of the earnings are spent on dividend by TT. This is a low number and sustainable payout ratio.
TT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP29.96%
EPS Next 2Y20.25%
EPS Next 3Y17.41%
TRANE TECHNOLOGIES PLC
NYSE:TT (1/21/2025, 8:04:00 PM)
After market: 397.15 0 (0%)397.15
+7.96 (+2.05%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners87.66%
Inst Owner Change-0.85%
Ins Owners0.3%
Ins Owner Change-0.17%
Market Cap89.37B
Analysts72.35
Price Target435.38 (9.63%)
Short Float %1.39%
Short Ratio2.58
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
Yearly Dividend3
Dividend Growth(5Y)8.94%
DP29.96%
Div Incr Years14
Div Non Decr Years14
Ex-DateN/A
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)1.33%
PT rev (3m)17.56%
EPS NQ rev (1m)0%
EPS NQ rev (3m)6.43%
EPS NY rev (1m)0%
EPS NY rev (3m)2.54%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.93%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.84 | ||
| Fwd PE | 30.35 | ||
| P/S | 4.61 | ||
| P/FCF | 31.33 | ||
| P/OCF | 28.1 | ||
| P/B | 11.77 | ||
| P/tB | N/A | ||
| EV/EBITDA | 24.59 |
EPS(TTM)10.78
EY2.71%
EPS(NY)13.09
Fwd EY3.29%
FCF(TTM)12.67
FCFY3.19%
OCF(TTM)14.13
OCFY3.56%
SpS86.16
BVpS33.74
TBVpS-8.83
PEG (NY)1.38
PEG (5Y)3.69
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 | 6.22 |
F-Score8
WACC6.95%
ROIC/WACC2.78
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 Y26.72%
EPS Next 2Y20.25%
EPS Next 3Y17.41%
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 2Y9.57%
Revenue Next 3Y8.74%
Revenue Next 5Y8.58%
EBIT growth 1Y21.28%
EBIT growth 3Y21.61%
EBIT growth 5Y13.21%
EBIT Next Year33.16%
EBIT Next 3Y17.27%
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%