TRANE TECHNOLOGIES PLC (TT) Stock Fundamental Analysis
USA - NYSE:TT - IE00BK9ZQ967 - Common Stock
424.2 USD
+5.83 (+1.39%)
424.2 USD
0 (0%)
Overall TT gets a fundamental rating of 7 out of 10. We evaluated TT against 41 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 quite expensive at the moment. It does show a decent growth rate. 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.
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
TT's Return On Assets of 13.61% is amongst the best of the industry. TT outperforms 82.93% of its industry peers.
TT has a better Return On Equity (36.46%) than 92.68% of its industry peers.
TT has a better Return On Invested Capital (21.67%) than 90.24% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TT is significantly above the industry average of 12.70%.
The 3 year average ROIC (17.76%) for TT is below the current ROIC(21.67%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.61% | ||
| ROE | 36.46% | ||
| ROIC | 21.67% |
ROA(3y)10.97%
ROA(5y)9.1%
ROE(3y)30.74%
ROE(5y)25.66%
ROIC(3y)17.76%
ROIC(5y)15.01%
1.3 Margins
Looking at the Profit Margin, with a value of 13.76%, TT is in the better half of the industry, outperforming 73.17% of the companies in the same industry.
In the last couple of years the Profit Margin of TT has grown nicely.
TT's Operating Margin of 18.39% is fine compared to the rest of the industry. TT outperforms 73.17% of its industry peers.
TT's Operating Margin has improved in the last couple of years.
The Gross Margin of TT (36.26%) 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 | 18.39% | ||
| PM (TTM) | 13.76% | ||
| GM | 36.26% |
OM growth 3Y6.75%
OM growth 5Y6.01%
PM growth 3Y8.74%
PM growth 5Y3.71%
GM growth 3Y4.06%
GM growth 5Y2.99%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), TT 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.
TT has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.53 indicates that TT is not in any danger for bankruptcy at the moment.
TT's Altman-Z score of 6.53 is fine compared to the rest of the industry. TT outperforms 78.05% of its industry peers.
TT has a debt to FCF ratio of 1.64. This is a very positive value and a sign of high solvency as it would only need 1.64 years to pay back of all of its debts.
TT's Debt to FCF ratio of 1.64 is amongst the best of the industry. TT outperforms 80.49% of its industry peers.
TT has a Debt/Equity ratio of 0.50. This is a neutral value indicating TT is somewhat dependend on debt financing.
TT has a Debt to Equity ratio (0.50) which 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 | 0.5 | ||
| Debt/FCF | 1.64 | ||
| Altman-Z | 6.53 |
ROIC/WACC2.92
WACC7.41%
2.3 Liquidity
A Current Ratio of 1.10 indicates that TT should not have too much problems paying its short term obligations.
The Current ratio of TT (1.10) is worse than 82.93% of its industry peers.
A Quick Ratio of 0.76 indicates that TT may have some problems paying its short term obligations.
TT has a Quick ratio of 0.76. This is amonst the worse of the industry: TT underperforms 80.49% 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 | 1.1 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
TT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.69%, which is quite impressive.
Measured over the past years, TT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.99% on average per year.
Looking at the last year, TT shows a quite strong growth in Revenue. The Revenue has grown by 10.20% in the last year.
The Revenue has been growing by 8.69% on average over the past years. This is quite good.
EPS 1Y (TTM)20.69%
EPS 3Y22.59%
EPS 5Y11.99%
EPS Q2Q%17.58%
Revenue 1Y (TTM)10.2%
Revenue growth 3Y11.96%
Revenue growth 5Y8.69%
Sales Q2Q%8.27%
3.2 Future
The Earnings Per Share is expected to grow by 10.27% on average over the next years. This is quite good.
Based on estimates for the next years, TT will show a small growth in Revenue. The Revenue will grow by 7.20% on average per year.
EPS Next Y19.76%
EPS Next 2Y16.26%
EPS Next 3Y14.99%
EPS Next 5Y10.27%
Revenue Next Year8.98%
Revenue Next 2Y8.25%
Revenue Next 3Y7.83%
Revenue Next 5Y7.2%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 34.46 indicates a quite expensive valuation of TT.
75.61% of the companies in the same industry are cheaper than TT, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of TT to the average of the S&P500 Index (27.77), we can say TT is valued slightly more expensively.
A Price/Forward Earnings ratio of 27.97 indicates a quite expensive valuation of TT.
Based on the Price/Forward Earnings ratio, TT is valued a bit more expensive than 70.73% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.23, TT is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.46 | ||
| Fwd PE | 27.97 |
4.2 Price Multiples
75.61% of the companies in the same industry are cheaper than TT, based on the Enterprise Value to EBITDA ratio.
TT's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.58 | ||
| EV/EBITDA | 23.06 |
4.3 Compensation for Growth
TT's 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.
A more expensive valuation may be justified as TT's earnings are expected to grow with 14.99% in the coming years.
PEG (NY)1.74
PEG (5Y)2.87
EPS Next 2Y16.26%
EPS Next 3Y14.99%
5. Dividend
5.1 Amount
With a yearly dividend of 0.90%, TT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.25, TT pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.90, TT pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
5.2 History
The dividend of TT is nicely growing with an annual growth rate of 9.56%!
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)9.56%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
27.94% 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.
DP27.94%
EPS Next 2Y16.26%
EPS Next 3Y14.99%
424.2
+5.83 (+1.39%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners90.82%
Inst Owner Change0.1%
Ins Owners0.26%
Ins Owner Change0.24%
Market Cap94.39B
Analysts71.18
Price Target467.25 (10.15%)
Short Float %1.37%
Short Ratio2.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
Yearly Dividend3.35
Dividend Growth(5Y)9.56%
DP27.94%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.41%
Min EPS beat(2)-0.67%
Max EPS beat(2)7.49%
EPS beat(4)2
Avg EPS beat(4)1.81%
Min EPS beat(4)-0.67%
Max EPS beat(4)7.49%
EPS beat(8)5
Avg EPS beat(8)3.11%
EPS beat(12)9
Avg EPS beat(12)3.38%
EPS beat(16)11
Avg EPS beat(16)2.86%
Revenue beat(2)1
Avg Revenue beat(2)-0.88%
Min Revenue beat(2)-3.39%
Max Revenue beat(2)1.64%
Revenue beat(4)1
Avg Revenue beat(4)-0.92%
Min Revenue beat(4)-3.39%
Max Revenue beat(4)1.64%
Revenue beat(8)3
Avg Revenue beat(8)-0.67%
Revenue beat(12)5
Avg Revenue beat(12)-0.47%
Revenue beat(16)6
Avg Revenue beat(16)-0.64%
PT rev (1m)-0.49%
PT rev (3m)8.8%
EPS NQ rev (1m)-0.32%
EPS NQ rev (3m)-0.45%
EPS NY rev (1m)0%
EPS NY rev (3m)0.81%
Revenue NQ rev (1m)-0.48%
Revenue NQ rev (3m)-1.37%
Revenue NY rev (1m)-0.31%
Revenue NY rev (3m)-0.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.46 | ||
| Fwd PE | 27.97 | ||
| P/S | 4.55 | ||
| P/FCF | 33.58 | ||
| P/OCF | 29.19 | ||
| P/B | 12.05 | ||
| P/tB | N/A | ||
| EV/EBITDA | 23.06 |
EPS(TTM)12.31
EY2.9%
EPS(NY)15.17
Fwd EY3.58%
FCF(TTM)12.63
FCFY2.98%
OCF(TTM)14.53
OCFY3.43%
SpS93.25
BVpS35.21
TBVpS-8.63
PEG (NY)1.74
PEG (5Y)2.87
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.61% | ||
| ROE | 36.46% | ||
| ROCE | 26.89% | ||
| ROIC | 21.67% | ||
| ROICexc | 22.92% | ||
| ROICexgc | 83.99% | ||
| OM | 18.39% | ||
| PM (TTM) | 13.76% | ||
| GM | 36.26% | ||
| FCFM | 13.55% |
ROA(3y)10.97%
ROA(5y)9.1%
ROE(3y)30.74%
ROE(5y)25.66%
ROIC(3y)17.76%
ROIC(5y)15.01%
ROICexc(3y)19.7%
ROICexc(5y)17.25%
ROICexgc(3y)86.55%
ROICexgc(5y)79.73%
ROCE(3y)22.03%
ROCE(5y)18.62%
ROICexcg growth 3Y9.37%
ROICexcg growth 5Y29.75%
ROICexc growth 3Y15.09%
ROICexc growth 5Y17.85%
OM growth 3Y6.75%
OM growth 5Y6.01%
PM growth 3Y8.74%
PM growth 5Y3.71%
GM growth 3Y4.06%
GM growth 5Y2.99%
F-Score8
Asset Turnover0.99
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | 1.64 | ||
| Debt/EBITDA | 0.93 | ||
| Cap/Depr | 108.69% | ||
| Cap/Sales | 2.04% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 76.93% | ||
| Profit Quality | 98.44% | ||
| Current Ratio | 1.1 | ||
| Quick Ratio | 0.76 | ||
| Altman-Z | 6.53 |
F-Score8
WACC7.41%
ROIC/WACC2.92
Cap/Depr(3y)91.41%
Cap/Depr(5y)79.68%
Cap/Sales(3y)1.8%
Cap/Sales(5y)1.63%
Profit Quality(3y)93.42%
Profit Quality(5y)105.39%
High Growth Momentum
Growth
EPS 1Y (TTM)20.69%
EPS 3Y22.59%
EPS 5Y11.99%
EPS Q2Q%17.58%
EPS Next Y19.76%
EPS Next 2Y16.26%
EPS Next 3Y14.99%
EPS Next 5Y10.27%
Revenue 1Y (TTM)10.2%
Revenue growth 3Y11.96%
Revenue growth 5Y8.69%
Sales Q2Q%8.27%
Revenue Next Year8.98%
Revenue Next 2Y8.25%
Revenue Next 3Y7.83%
Revenue Next 5Y7.2%
EBIT growth 1Y18.49%
EBIT growth 3Y19.52%
EBIT growth 5Y15.23%
EBIT Next Year25.27%
EBIT Next 3Y14.95%
EBIT Next 5Y8.89%
FCF growth 1Y84.83%
FCF growth 3Y26.67%
FCF growth 5Y10.75%
OCF growth 1Y79.37%
OCF growth 3Y25.58%
OCF growth 5Y10.38%