TRANE TECHNOLOGIES PLC (TT) Stock Fundamental Analysis
NYSE:TT - IE00BK9ZQ967 - Common Stock
408.31 USD
-2.62 (-0.64%)
408.31 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. Both the health and profitability get an excellent rating, making TT a very profitable company, without any liquidiy or solvency issues. While showing a medium growth rate, TT is valued expensive at the moment. These ratings could make TT a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
TT had positive earnings in the past year.
In the past year TT had a positive cash flow from operations.
Each year in the past 5 years TT has been profitable.
TT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TT has a better Return On Assets (13.61%) than 85.37% of its industry peers.
Looking at the Return On Equity, with a value of 36.46%, TT belongs to the top of the industry, outperforming 92.68% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 21.67%, TT belongs to the top of the industry, outperforming 90.24% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TT is significantly above the industry average of 12.73%.
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.
In the last couple of years the Operating Margin of TT has grown nicely.
With a Gross Margin value of 36.26%, TT perfoms like the industry average, outperforming 58.54% of the companies in the same 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
TT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, TT has less shares outstanding
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
An Altman-Z score of 6.45 indicates that TT is not in any danger for bankruptcy at the moment.
The Altman-Z score of TT (6.45) is better than 75.61% 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.
The Debt to FCF ratio of TT (1.64) is better than 80.49% of its industry peers.
A Debt/Equity ratio of 0.50 indicates that 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.
Even though the debt/equity ratio score it not favorable for TT, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | 1.64 | ||
| Altman-Z | 6.45 |
ROIC/WACC2.96
WACC7.31%
2.3 Liquidity
A Current Ratio of 1.10 indicates that TT should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.10, TT is doing worse than 85.37% of the companies in the same industry.
A Quick Ratio of 0.76 indicates that TT may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.76, TT is doing worse than 82.93% of the companies in the same industry.
The current and quick ratio evaluation for TT is rather negative, while it does have 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
The Earnings Per Share has grown by an impressive 20.69% over the past year.
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.
TT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.20%.
TT shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.69% yearly.
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
Based on estimates for the next years, TT will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.41% on average per year.
TT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.00% yearly.
EPS Next Y20.2%
EPS Next 2Y16.29%
EPS Next 3Y15.06%
EPS Next 5Y9.41%
Revenue Next Year9.43%
Revenue Next 2Y8.39%
Revenue Next 3Y7.96%
Revenue Next 5Y7%
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 decreasing.
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
A Price/Earnings ratio of 33.17 indicates a quite expensive valuation of TT.
TT's Price/Earnings ratio is a bit more expensive when compared to the industry. TT is more expensive than 73.17% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.84. TT is valued slightly more expensive when compared to this.
A Price/Forward Earnings ratio of 26.91 indicates a quite expensive valuation of TT.
Based on the Price/Forward Earnings ratio, TT is valued a bit more expensive than the industry average as 70.73% of the companies are valued more cheaply.
TT's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.48.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.17 | ||
| Fwd PE | 26.91 |
4.2 Price Multiples
TT's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. TT is more expensive than 75.61% of the companies in the same industry.
TT's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.32 | ||
| EV/EBITDA | 22.66 |
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 15.06% in the coming years.
PEG (NY)1.64
PEG (5Y)2.77
EPS Next 2Y16.29%
EPS Next 3Y15.06%
5. Dividend
5.1 Amount
With a yearly dividend of 0.89%, TT is not a good candidate for dividend investing.
TT's Dividend Yield is a higher than the industry average which is at 1.11.
Compared to an average S&P500 Dividend Yield of 2.32, TT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
5.2 History
On average, the dividend of TT grows each year by 9.56%, 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)9.56%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
TT pays out 27.94% of its income as dividend. This is a sustainable payout ratio.
The dividend of TT is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP27.94%
EPS Next 2Y16.29%
EPS Next 3Y15.06%
408.31
-2.62 (-0.64%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners90.29%
Inst Owner Change0.12%
Ins Owners0.26%
Ins Owner Change0.69%
Market Cap90.86B
Analysts72.35
Price Target470.13 (15.14%)
Short Float %1.36%
Short Ratio2.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
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)6.96%
PT rev (3m)12.3%
EPS NQ rev (1m)0.16%
EPS NQ rev (3m)-1.87%
EPS NY rev (1m)1.18%
EPS NY rev (3m)1.42%
Revenue NQ rev (1m)-0.13%
Revenue NQ rev (3m)-0.95%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.17 | ||
| Fwd PE | 26.91 | ||
| P/S | 4.38 | ||
| P/FCF | 32.32 | ||
| P/OCF | 28.09 | ||
| P/B | 11.6 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.66 |
EPS(TTM)12.31
EY3.01%
EPS(NY)15.17
Fwd EY3.72%
FCF(TTM)12.63
FCFY3.09%
OCF(TTM)14.53
OCFY3.56%
SpS93.25
BVpS35.21
TBVpS-8.63
PEG (NY)1.64
PEG (5Y)2.77
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 | 6.45 |
F-Score8
WACC7.31%
ROIC/WACC2.96
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 Y20.2%
EPS Next 2Y16.29%
EPS Next 3Y15.06%
EPS Next 5Y9.41%
Revenue 1Y (TTM)10.2%
Revenue growth 3Y11.96%
Revenue growth 5Y8.69%
Sales Q2Q%8.27%
Revenue Next Year9.43%
Revenue Next 2Y8.39%
Revenue Next 3Y7.96%
Revenue Next 5Y7%
EBIT growth 1Y18.49%
EBIT growth 3Y19.52%
EBIT growth 5Y15.23%
EBIT Next Year25.74%
EBIT Next 3Y14.66%
EBIT Next 5Y8.69%
FCF growth 1Y84.83%
FCF growth 3Y26.67%
FCF growth 5Y10.75%
OCF growth 1Y79.37%
OCF growth 3Y25.58%
OCF growth 5Y10.38%