Critical Analysis: Trane Technologies (TT) & Its Peers

Trane Technologies (NYSE:TT) is one of 94 public companies in the “Building Products” industry, but how does it weigh in compared to its peers? We will compare Trane Technologies to similar companies based on the strength of its dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Earnings and Valuation

This table compares Trane Technologies and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Trane Technologies	$21.32 billion	$2.92 billion	35.25
Trane Technologies Competitors	$4.00 billion	$4.73 billion	42.85

Trane Technologies has higher revenue, but lower earnings than its peers. Trane Technologies is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Trane Technologies pays an annual dividend of $4.20 per share and has a dividend yield of 0.9%. Trane Technologies pays out 32.5% of its earnings in the form of a dividend. As a group, “Building Products” companies pay a dividend yield of 6.9% and pay out 37.0% of their earnings in the form of a dividend. Trane Technologies has increased its dividend for 5 consecutive years.

Profitability

This table compares Trane Technologies and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trane Technologies	13.28%	35.72%	13.65%
Trane Technologies Competitors	3.30%	43.63%	5.07%

Analyst Ratings

This is a breakdown of current ratings for Trane Technologies and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trane Technologies	1	2	10	2	2.87
Trane Technologies Competitors	692	3762	4884	219	2.48

Trane Technologies presently has a consensus target price of $520.07, suggesting a potential upside of 14.11%. As a group, “Building Products” companies have a potential upside of 24.36%. Given Trane Technologies’ peers higher possible upside, analysts clearly believe Trane Technologies has less favorable growth aspects than its peers.

Insider & Institutional Ownership

83.0% of Trane Technologies shares are held by institutional investors. Comparatively, 63.6% of shares of all “Building Products” companies are held by institutional investors. 0.4% of Trane Technologies shares are held by insiders. Comparatively, 10.3% of shares of all “Building Products” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Trane Technologies has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Trane Technologies’ peers have a beta of 1.05, suggesting that their average stock price is 5% more volatile than the S&P 500.

Summary

Trane Technologies beats its peers on 9 of the 15 factors compared.

About Trane Technologies

Trane Technologies plc, together with its subsidiaries, designs, manufactures, sells, and services of solutions for heating, ventilation, air conditioning, custom, and custom and transport refrigeration in Ireland and internationally. It offers air conditioners, exchangers, and handlers; airside and terminal devices; air sourced heat pumps, auxiliary power units; chillers; coils and condensers; gensets; dehumidifiers; ductless; furnaces; home automation products; humidifiers; indoor air quality assessments and related products; large and light commercial unitary products; refrigerant reclamation products; thermostats/controls; transport heater products; variable refrigerant flow products; and water source heat pumps. The company also provides building management, telematic, control, energy efficiency and infrastructure program, geothermal, thermal energy, thermostats, rate chambers, package heating and cooling, temporary heating and cooling, and unitary systems; bus, rail, and multi-pipe heating, ventilation, and air conditioning systems; and container, diesel-powered, truck, industrial, rail, self-powered truck, trailer, and vehicle-powered truck refrigeration and air filtration systems, as well as aftermarket and OEM parts and supplies. In addition, it offers energy and facility management, installation and performance contracting, repair and maintenance, and rental services. It markets and sells its products under the Trane and Thermo King brands through sales offices, distributors, and dealers; and through sales and service companies with a supporting chain of distributors. The company was formerly known as Ingersoll-Rand Plc and changed its name to Trane Technologies plc in March 2020. Trane Technologies plc was founded in 1885 and is headquartered in Swords, Ireland.