TRANE TECHNOLOGIES PLC (NYSE:TT) – A Quality Stock Worth Considering

TRANE TECHNOLOGIES PLC (NYSE:TT) stands out as a potential candidate for quality investors, meeting key criteria for long-term growth, profitability, and financial health. The company, known for its climate solutions across buildings, homes, and transportation, demonstrates strong fundamentals that align with the principles of quality investing.

Why TRANE TECHNOLOGIES Fits the Quality Investing Profile

• Strong Revenue and EBIT Growth
  The company has delivered a 5-year revenue growth rate of 6.65%, while EBIT growth has been even stronger at 15.23%. This indicates improving profitability, a key trait for quality businesses.

• High Return on Invested Capital (ROIC)
  With an ROIC (excluding cash and goodwill) of 93.1%, TRANE TECHNOLOGIES efficiently generates returns from its capital investments, far exceeding the 15% threshold typically sought by quality investors.

• Healthy Debt Management
  The company’s debt-to-free cash flow ratio of 1.68 suggests it could repay all outstanding debt in less than two years using current cash flows, reflecting strong financial discipline.

• Profit Quality
  TRANE TECHNOLOGIES converts net income into free cash flow at an impressive rate, with a 5-year average profit quality of 105.4%. This indicates earnings are backed by real cash generation rather than accounting adjustments.

Fundamental Analysis Summary

The company scores well on profitability (8/10) and financial health (7/10), supported by high margins, consistent earnings growth, and a solid balance sheet. While its valuation appears expensive compared to industry peers, its strong fundamentals may justify a premium.

Our Caviar Cruise screener lists more quality stocks updated daily. For a deeper look, review the full fundamental report on TT.

Disclaimer

This is not investing advice. The observations here are based on current data, but investors should conduct their own research before making decisions.