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6 Reasons to Add Trane Technologies (TT) to Your Portfolio

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Trane Technologies plc (TT - Free Report) is a technology services provider that has performed extremely well over the past year and has the potential to sustain the momentum in the near term. Consequently, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

What Makes Trane an Attractive Pick?

An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse in the past year. Shares of Trane Technologies have returned a massive 96% against 19.1% decline of the industry it belongs to.

Solid Rank: Trane Technologies has a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Three estimates for 2021 moved north over the past 60 days versus no southward revision for Trane Technologies, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2021 earnings climbed 2%.

Positive Earnings Surprise History: Trane has an impressive earnings surprise history. The company outpaced the consensus mark in all of the trailing four quarters, delivering an average beat of 42%.

Strong Growth Prospects: The company’s Zacks Consensus Estimate for 2021 earnings of $6.04 reflects year-over-year growth of 35.4%. Earnings are expected to register 13.4% growth in 2022. The stock’s long-term expected earnings per share growth rate is 21.5%.

Growth Factors: Trane Technologies remains focused on sustained improvement in revenues, earnings and cash flow. The company is trying to increase revenue stream from parts, services, controls, used equipment and rentals, and improved operating efficiencies. With a view to lower its cost structure, Trane Technologies targets $100 million in annualized cost savings for 2021 and $300 million annualized savings by 2023.

Trane puts consistent efforts to reward its shareholders. During 2020, the company repurchased shares worth $250 million and paid out dividends totaling $507.3 million. It repurchased shares worth $750.1 million and $900.2 million, and paid out dividends totaling $15.8 and $41.4 million, in 2019 and 2018, respectively. Such moves indicate Trane’s commitment toward boosting shareholders’ value and underlining its confidence in its business.

Other Stocks to Consider

Some other top-ranked stocks from the broader Zacks Business Services sector are Accenture (ACN - Free Report) , Cross Country Healthcare (CCRN - Free Report) and Paychex (PAYX - Free Report) , each carrying a Zacks Rank #2.

The long-term expected earnings per share (three to five years) growth rate for Accenture, Cross Country Healthcare and Paychexis pegged at 10%, 10.5% and 8%, respectively.