Armstrong World Industries (NYSE:AWI) vs. Trane Technologies (NYSE:TT) Head-To-Head Survey

Trane Technologies (NYSE:TT) and Armstrong World Industries (NYSE:AWI) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Profitability

This table compares Trane Technologies and Armstrong World Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trane Technologies	13.56%	37.26%	14.17%
Armstrong World Industries	18.38%	38.06%	17.16%

Dividends

Trane Technologies pays an annual dividend of $4.20 per share and has a dividend yield of 1.0%. Armstrong World Industries pays an annual dividend of $1.49 per share and has a dividend yield of 0.9%. Trane Technologies pays out 29.7% of its earnings in the form of a dividend. Armstrong World Industries pays out 19.9% 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 Armstrong World Industries has increased its dividend for 1 consecutive years. Trane Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

83.0% of Trane Technologies shares are owned by institutional investors. Comparatively, 98.9% of Armstrong World Industries shares are owned by institutional investors. 0.4% of Trane Technologies shares are owned by company insiders. Comparatively, 1.2% of Armstrong World Industries shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Trane Technologies has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Armstrong World Industries has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Earnings and Valuation

This table compares Trane Technologies and Armstrong World Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trane Technologies	$21.32 billion	4.13	$2.92 billion	$14.16	28.39
Armstrong World Industries	$1.62 billion	4.42	$308.70 million	$7.49	22.88

Trane Technologies has higher revenue and earnings than Armstrong World Industries. Armstrong World Industries 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 Trane Technologies and Armstrong World Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trane Technologies	0	4	14	2	2.90
Armstrong World Industries	0	2	7	0	2.78

Trane Technologies presently has a consensus target price of $535.89, suggesting a potential upside of 33.31%. Armstrong World Industries has a consensus target price of $203.12, suggesting a potential upside of 18.50%. Given Trane Technologies’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Trane Technologies is more favorable than Armstrong World Industries.

Summary

Trane Technologies beats Armstrong World Industries on 11 of the 18 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 Armstrong World Industries

Armstrong World Industries, Inc., together with its subsidiaries, engages in the design, manufacture, and sale of ceiling and wall solutions in the Americas. It operates through Mineral Fiber and Architectural Specialties segments. The company offers mineral fiber, fiberglass wool, metal, wood, felt, wood fiber, and glass-reinforced-gypsum; ceiling component products, such as ceiling perimeters and trims, as well as grid products that support drywall ceiling systems; ceilings, walls, and facades for use in commercial settings; and manufactures ceiling suspension system (grid) products. It serves commercial and residential construction markets, as well as renovation of existing buildings sectors. The company sells its products to resale distributors, ceiling system contractors, wholesalers, and retailers comprising large home centers. Armstrong World Industries, Inc. was founded in 1860 and is headquartered in Lancaster, Pennsylvania.