Assessing the Upcoming Dividend and Historical Performance of Trane Technologies PLC
Trane Technologies PLC (TT, Financial) recently announced a dividend of $0.75 per share, payable on 2023-12-29, with the ex-dividend date set for 2023-11-30. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Trane Technologies PLC's dividend performance and assess its sustainability.
Introduction to Trane Technologies PLC
Trane Technologies manufactures and services commercial and residential HVAC systems and transportation refrigeration solutions under its prominent Trane, American Standard, and Thermo King brands. The company, with a market cap of $16 billion, generates approximately 70% of sales from equipment and 30% from parts and services. Although domiciled in Ireland, North America is its largest market, accounting for over 70% of its revenue.
Trane Technologies PLC's Dividend History
Trane Technologies PLC has maintained a consistent dividend payment record since 1986, with dividends currently distributed on a quarterly basis. Trane Technologies PLC has increased its dividend each year since 2010, earning the status of a dividend achiever—a title reserved for companies with a minimum of 13 consecutive years of dividend increases.
Below is a chart showing annual Dividends Per Share to track historical trends.
Dividend Yield and Growth of Trane Technologies PLC
As of today, Trane Technologies PLC has a 12-month trailing dividend yield of 1.31% and a 12-month forward dividend yield of 1.35%. This indicates an expected increase in dividend payments over the next year. Over the past three years, Trane Technologies PLC's annual dividend growth rate was 8.10%, which further increased to 8.40% over a five-year period. Impressively, the annual dividends per share growth rate over the past decade stands at 14.70%.
Based on the current dividend yield and five-year growth rate, the 5-year yield on cost for Trane Technologies PLC stock is approximately 1.96%.
Evaluating the Sustainability of Trane Technologies PLC's Dividend
To assess the sustainability of the dividend, one must examine the company's payout ratio. Trane Technologies PLC's dividend payout ratio is currently 0.34, suggesting a healthy balance between paying dividends and retaining earnings for future growth. Additionally, the company's profitability rank of 9 out of 10, as of 2023-09-30, indicates strong earnings potential relative to peers. Trane Technologies PLC has also consistently reported positive net income over the past decade, reinforcing its financial stability.
Future Growth Prospects of Trane Technologies PLC
Trane Technologies PLC's robust growth rank of 9 out of 10 bodes well for its future prospects. The company's revenue per share and 3-year revenue growth rate of 8.40% per year, outperform approximately 66.17% of global competitors, signaling a strong revenue model. The 3-year EPS growth rate of 17.40% per year and 5-year EBITDA growth rate of 8.80% further demonstrate Trane Technologies PLC's capability to grow earnings, which is vital for sustaining dividends over the long term.
Conclusion: The Dividend Outlook for Trane Technologies PLC
In conclusion, Trane Technologies PLC's consistent dividend payments, robust dividend growth rate, prudent payout ratio, and solid profitability and growth metrics paint a promising picture for current and prospective investors. As the company continues to navigate the complexities of the HVAC and refrigeration industries, its financial health and commitment to shareholder returns suggest that it could remain a reliable choice for value investors focused on dividend income. Will Trane Technologies PLC continue its dividend growth streak, and how will its strategic initiatives influence future payouts? Investors should monitor these developments closely while considering the broader market context. For those seeking high-dividend yield stocks, GuruFocus Premium offers the High Dividend Yield Screener as a valuable resource.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
