Comfort Systems USA (NYSE:FIX) vs. Trane Technologies (NYSE:TT) Critical Review

Comfort Systems USA (NYSE:FIX) and Trane Technologies (NYSE:TT) are both large-cap construction companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.

Risk and Volatility

Comfort Systems USA has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, Trane Technologies has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Profitability

This table compares Comfort Systems USA and Trane Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Comfort Systems USA	8.13%	36.35%	13.30%
Trane Technologies	13.47%	36.10%	13.13%

Dividends

Comfort Systems USA pays an annual dividend of $1.80 per share and has a dividend yield of 0.4%. Trane Technologies pays an annual dividend of $3.76 per share and has a dividend yield of 0.9%. Comfort Systems USA pays out 10.8% of its earnings in the form of a dividend. Trane Technologies pays out 31.3% 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. Comfort Systems USA has raised its dividend for 13 consecutive years and Trane Technologies has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and price targets for Comfort Systems USA and Trane Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Comfort Systems USA	0	0	5	0	3.00
Trane Technologies	1	7	7	1	2.50

Comfort Systems USA presently has a consensus target price of $525.80, suggesting a potential upside of 5.38%. Trane Technologies has a consensus target price of $427.47, suggesting a potential upside of 1.87%. Given Comfort Systems USA’s stronger consensus rating and higher possible upside, analysts plainly believe Comfort Systems USA is more favorable than Trane Technologies.

Valuation and Earnings

This table compares Comfort Systems USA and Trane Technologies”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Comfort Systems USA	$7.03 billion	2.50	$522.43 million	$16.67	29.93
Trane Technologies	$19.84 billion	4.72	$2.57 billion	$12.02	34.91

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

Insider and Institutional Ownership

96.5% of Comfort Systems USA shares are held by institutional investors. Comparatively, 83.0% of Trane Technologies shares are held by institutional investors. 1.6% of Comfort Systems USA 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 is poised for long-term growth.

Summary

Comfort Systems USA beats Trane Technologies on 10 of the 18 factors compared between the two stocks.

About Comfort Systems USA

Comfort Systems USA, Inc., together with its subsidiaries, provides mechanical and electrical installation, renovation, maintenance, repair, and replacement services for the mechanical and electrical services industry in the United States. It operates through two segments, Mechanical and Electrical. The company offers heating, ventilation, and air conditioning systems, as well as plumbing, electrical, piping and controls, off-site construction, monitoring, and fire protection. It also engages in the design, engineering, integration, installation, and start-up of mechanical, electrical, and plumbing (MEP) and related systems in new buildings; and renovation, expansion, maintenance, monitoring, repair, and replacement of MEP systems in existing buildings. In addition, the company provides remote monitoring of power usage, temperature, pressure, humidity and air flow for MEP and other building systems. It serves building owners and developers, general contractors, architects, consulting engineers, and property managers in the commercial, industrial, and institutional MEP markets. Comfort Systems USA, Inc. was founded in 1917 and is headquartered in Houston, Texas.

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.