Head-To-Head Review: Trane Technologies (NYSE:TT) and Griffon (NYSE:GFF)

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

Profitability

This table compares Trane Technologies and Griffon’s 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%
Griffon	8.08%	249.31%	12.64%

Volatility and Risk

Trane Technologies has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, Griffon has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500.

Institutional and Insider Ownership

83.0% of Trane Technologies shares are owned by institutional investors. Comparatively, 73.2% of Griffon shares are owned by institutional investors. 0.4% of Trane Technologies shares are owned by insiders. Comparatively, 10.2% of Griffon shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Trane Technologies and Griffon”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trane Technologies	$22.21 billion	4.67	$2.92 billion	$13.20	35.68
Griffon	$2.56 billion	1.67	$51.11 million	$3.92	24.07

Trane Technologies has higher revenue and earnings than Griffon. Griffon 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 Recommendations

This is a breakdown of current ratings for Trane Technologies and Griffon, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trane Technologies	0	2	11	2	3.00
Griffon	0	0	2	2	3.50

Trane Technologies presently has a consensus target price of $531.21, suggesting a potential upside of 12.79%. Griffon has a consensus target price of $122.50, suggesting a potential upside of 29.86%. Given Griffon’s stronger consensus rating and higher probable upside, analysts clearly believe Griffon is more favorable than Trane Technologies.

Dividends

Trane Technologies pays an annual dividend of $4.20 per share and has a dividend yield of 0.9%. Griffon pays an annual dividend of $0.88 per share and has a dividend yield of 0.9%. Trane Technologies pays out 31.8% of its earnings in the form of a dividend. Griffon pays out 22.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Trane Technologies has increased its dividend for 5 consecutive years and Griffon has increased its dividend for 1 consecutive years. Griffon is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Trane Technologies beats Griffon on 10 of the 17 factors compared between the two stocks.

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.

About Griffon

Griffon Corporation, through its subsidiaries, provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. The company operates through two segments: Home and Building Products, and Consumer and Professional Products. The Home and Building Products segment manufactures and markets residential and commercial sectional garage doors, rolling steel service doors, fire doors, shutters, steel security grilles, and room dividers for the use in commercial construction and repair, and home remodeling applications. The segment also sells related products, such as garage door openers. The Consumer and Professional Products segment manufactures and markets long-handled engineered tools, including spades, hoes, cultivators, weeders, post hole diggers, scrapers, edgers and forks; wheelbarrows and lawn carts; snow tools comprising pushers, roof rakes, sled sleigh shovels, scoops, and ice scrapers; and pruning products, such as pruners, loppers, shears, and other tools. The segment also offers striking tools, including axes, picks, mattocks, mauls, wood splitters, sledgehammers, pry bars, and repair handles; traditional and gardening hand tools comprising hammers, screwdrivers, pliers, adjustable wrenches, handsaws, tape measures, levels, clamps, trowels, cultivators, weeders, and other hand tools; indoor and outdoor planters and lawn accessories; and garden hoses and hose reels. In addition, the segment provides home organization products, including wire and wood shelving, containers, storage cabinets, and other closet and home organization accessories; residential, industrial, and commercial fans; and cleaning products, such as brooms, brushes, squeegees, and other cleaning products. The company was formerly known as Instrument Systems Corporation and changed its name to Griffon Corporation in June 1992. Griffon Corporation was founded in 1774 and is headquartered in New York, New York.