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Here's Why Investors Should Retain Trane Technologies (TT) Now

Shares of Trane Technologies plc TT have gained 17.5% over the past three months against the 9.3% decline of the industry it belongs to. TT’s revenues are anticipated to grow 11% and 3.2% in 2022 and 2023, respectively.

Zacks Investment Research
Zacks Investment Research

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Factors That Augur Well

Trane Technologies has a consistent record of rewarding its shareholders through dividend payments and share repurchases. In 2021, 2020 and 2019, TT had repurchased shares worth $1.10 billion, $250 million and $750.1 million, respectively. It paid out $561.1 million, $507.3 million and $510.1 million of dividends during 2021, 2020 and 2019, respectively. Such moves indicate TT’s commitment to boosting its shareholder value and highlight its confidence in its business.

TT continues to pursue its broader growth objectives by focusing on steps to increase its revenue streams from parts, services, controls, used equipment and rentals. Also, Trane Technologies is focused on improving the quality of its products and services, and operating efficiencies to achieve a sustained improvement in earnings and cash flow.

Some Risks

Trane Technologies’ current ratio at the end of second-quarter 2022 was pegged at 1.09, lower than the current ratio of 1.31 reported at the end of first-quarter 2022 and the prior-year quarter’s 1.58. Decreasing current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations. The stock has been down 15% in the year-to-date period.

Zacks Rank and Stocks to Consider

Trane Technologies currently carries a Zacks Rank #3 (Hold). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks  Business Services sector are Genpact Limited G, Automatic Data Processing, Inc. ADP and CRA International, Inc. CRAI.

Genpact carries a Zacks Rank #2 at present. G has a long-term earnings growth expectation of 12.2%.

Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.

ADP carries a Zacks Rank #2 (Buy) at present. ADP has a long-term earnings growth expectation of 12%.

ADP delivered a trailing four-quarter earnings surprise of 5%, on average.

CRA International carries a Zacks Rank of 2, currently. CRAI has a long-term earnings growth expectation of 14.3%.

CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.

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Trane Technologies plc (TT) : Free Stock Analysis Report
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