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

TRANE TECHNOLOGIES PLC (NYSE:TT) stands out as a strong candidate for quality investors, according to our Caviar Cruise stock screener. The company demonstrates consistent growth, high profitability, and solid financial health, making it a compelling option for long-term investors. Below, we examine why TT fits the criteria of a quality investment.

Key Strengths of TRANE TECHNOLOGIES

• Strong Revenue and EBIT Growth
  TT has delivered a 5-year revenue growth rate of 6.65%, while EBIT growth has been even stronger at 15.23%. This indicates improving operational efficiency and pricing power.

• High Return on Invested Capital (ROIC)
  The company’s ROIC (excluding cash and goodwill) stands at 93.10%, well above our 15% threshold. This suggests TT effectively deploys capital to generate profits.

• Low Debt Burden
  With a Debt-to-Free Cash Flow ratio of 1.68, TT could repay its debt in under two years using current cash flows, reflecting strong financial health.

• Exceptional Profit Quality
  TT’s 5-year average Profit Quality (FCF/Net Income) is 105.39%, meaning it converts net income into cash efficiently—a hallmark of a well-run business.

Fundamental Analysis Summary

Our fundamental report assigns TT a score of 6 out of 10, highlighting:

• Profitability: High marks for ROIC (21.61%), ROE (36.53%), and margins.
• Financial Health: Strong solvency with manageable debt and a solid Altman-Z score (6.89).
• Valuation: Currently expensive (P/E of 36.57), but justified by strong earnings growth expectations (8.63% EPS growth forecast).

For investors seeking high-quality businesses, TT’s fundamentals make it worth further research.

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Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.