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. While showing a medium growth rate, TT is valued expensive at the moment. With these ratings, TT could be worth investigating further 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.
Each year in the past 5 years TT has been profitable.
Each year in the past 5 years TT had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 11.81%, TT is doing good in the industry, outperforming 74.36% of the companies in the same industry.
TT's Return On Equity of 32.51% is amongst the best of the industry. TT outperforms 84.62% of its industry peers.
TT has a better Return On Invested Capital (19.33%) than 84.62% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TT is in line with the industry average of 13.64%.
The 3 year average ROIC (15.41%) for TT is below the current ROIC(19.33%), indicating increased profibility in the last year.
| 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
TT has a Profit Margin of 12.73%. This is in the better half of the industry: TT outperforms 69.23% of its industry peers.
TT's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 17.43%, TT is in the better half of the industry, outperforming 64.10% of the companies in the same industry.
In the last couple of years the Operating Margin of TT has grown nicely.
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.
TT has less shares outstanding than it did 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 6.33. This indicates that TT is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.33, TT is in the better half of the industry, outperforming 74.36% of the companies in the same industry.
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.
The Debt to FCF ratio of TT (1.85) is better than 64.10% of its industry peers.
TT has a Debt/Equity ratio of 0.57. This is a neutral value indicating 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 48.72% 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 | 6.33 |
ROIC/WACC2.74
WACC7.05%
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.
TT has a worse Quick ratio (0.92) 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
The Earnings Per Share has grown by an impressive 23.91% over the past year.
The Earnings Per Share has been growing by 10.00% on average over the past years. This is quite good.
The Revenue has grown by 11.89% in the past year. This is quite good.
The Revenue has been growing slightly by 7.45% on average over the past years.
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 9.56% on average per year.
TT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.89% yearly.
EPS Next Y26.64%
EPS Next 2Y20%
EPS Next 3Y17.15%
EPS Next 5Y9.56%
Revenue Next Year11.51%
Revenue Next 2Y9.43%
Revenue Next 3Y8.56%
Revenue Next 5Y7.89%
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
The Price/Earnings ratio is 37.97, which means the current valuation is very expensive for TT.
Based on the Price/Earnings ratio, TT is valued more expensive than 82.05% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.53, TT is valued a bit more expensive.
A Price/Forward Earnings ratio of 31.40 indicates a quite expensive valuation of TT.
TT's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. TT is more expensive than 74.36% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.40. TT is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.97 | ||
| Fwd PE | 31.4 |
4.2 Price Multiples
79.49% of the companies in the same industry are cheaper than TT, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TT indicates a slightly more expensive valuation: TT is more expensive than 61.54% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.29 | ||
| EV/EBITDA | 25.22 |
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.
TT's earnings are expected to grow with 17.15% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.43
PEG (5Y)3.8
EPS Next 2Y20%
EPS Next 3Y17.15%
5. Dividend
5.1 Amount
With a yearly dividend of 0.82%, TT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 0.94, TT pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.82, TT pays less dividend than the S&P500 average, which is at 2.22.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
5.2 History
On average, the dividend of TT grows each year by 8.94%, which is quite nice.
TT has paid a dividend for at least 10 years, which is 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 Years13
Div Non Decr Years13
5.3 Sustainability
29.96% of the earnings are spent on dividend by TT. This is a low number and sustainable payout ratio.
The dividend of TT is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP29.96%
EPS Next 2Y20%
EPS Next 3Y17.15%
TRANE TECHNOLOGIES PLC
NYSE:TT (11/18/2024, 5:35:38 PM)
After market: 409.27 0 (0%)409.27
+1.78 (+0.44%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap92.09B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.97 | ||
| Fwd PE | 31.4 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.43
PEG (5Y)3.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.81% | ||
| ROE | 32.51% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.43% | ||
| PM (TTM) | 12.73% | ||
| GM | 35.28% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.93
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.22 | ||
| Quick Ratio | 0.92 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)23.91%
EPS 3Y26.7%
EPS 5Y
EPS Q2Q%
EPS Next Y26.64%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)11.89%
Revenue growth 3Y12.38%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y