Critical Analysis: Hayward (NYSE:HAYW) vs. Trane Technologies (NYSE:TT)

Hayward (NYSE:HAYW) and Trane Technologies (NYSE:TT) are both industrials companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Insider & Institutional Ownership

83.0% of Trane Technologies shares are held by institutional investors. 4.7% of Hayward shares are held by company insiders. Comparatively, 0.4% of Trane Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hayward	14.35%	11.95%	6.11%
Trane Technologies	13.56%	37.26%	14.17%

Risk & Volatility

Hayward has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, Trane Technologies has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.

Valuation & Earnings

This table compares Hayward and Trane Technologies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hayward	$1.18 billion	2.89	$151.57 million	$0.78	20.67
Trane Technologies	$21.32 billion	4.23	$2.92 billion	$14.16	28.98

Trane Technologies has higher revenue and earnings than Hayward. Hayward is trading at a lower price-to-earnings ratio than Trane Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for Hayward and Trane Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hayward	1	6	2	0	2.11
Trane Technologies	0	4	14	2	2.90

Hayward currently has a consensus target price of $17.12, suggesting a potential upside of 6.23%. Trane Technologies has a consensus target price of $536.79, suggesting a potential upside of 30.83%. Given Trane Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Trane Technologies is more favorable than Hayward.

Summary

Trane Technologies beats Hayward on 12 of the 15 factors compared between the two stocks.

About Hayward

Hayward Holdings, Inc. designs, manufactures, and markets a portfolio of pool equipment and associated automation systems in North America, Europe, and internationally. The company offers pool equipment, including pumps, filters, robotics, suction and pressure cleaners, gas heaters and heat pumps, water features and landscape lighting, water sanitizers, salt chlorine generators, safety equipment, and in-floor automated cleaning systems, as well as LED illumination solutions. It sells its products through specialty distributors, retailers, and buying groups. The company was founded in 1925 and is headquartered in Charlotte, North Carolina.

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.