Trane Technologies (NYSE:TT) & Trex (NYSE:TREX) Head to Head Contrast

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

Institutional and Insider Ownership

96.0% of Trex shares are owned by institutional investors. Comparatively, 83.0% of Trane Technologies shares are owned by institutional investors. 0.9% of Trex shares are owned by company insiders. Comparatively, 0.4% of Trane Technologies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Trex	14.68%	18.03%	11.76%
Trane Technologies	13.28%	35.72%	13.65%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trex	2	9	12	0	2.43
Trane Technologies	0	4	14	2	2.90

Trex presently has a consensus target price of $50.19, indicating a potential upside of 8.73%. Trane Technologies has a consensus target price of $539.42, indicating a potential upside of 16.01%. Given Trane Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Trane Technologies is more favorable than Trex.

Volatility & Risk

Trex has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, Trane Technologies has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trex	$1.17 billion	4.08	$190.41 million	$1.68	27.48
Trane Technologies	$21.32 billion	4.80	$2.92 billion	$13.20	35.23

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

Summary

Trane Technologies beats Trex on 11 of the 15 factors compared between the two stocks.

About Trex

Trex Company, Inc. manufactures and distributes composite decking, railing, and outdoor living products and accessories for residential and commercial markets in the United States. It offers decking products and accessories under the names Trex Transcend, Trex Select, Trex Signature, Trex Transcend Lineage, and Trex Enhance for protection against fading, staining, mold, and scratching; Trex Hideaway, a hidden fastening system; and Trex DeckLighting, a LED dimmable deck lighting for use on posts, floors, and steps. The company also provides Trex Transcend Railing products that are used in Trex decking products and other decking materials; Trex Select Railing products for a simple clean finished look; Trex Enhance Railing system; Trex Signature aluminum railing for a contemporary look; and Trex Select T-Rail railing products. In addition, it offers Trex Seclusions, a fencing product that includes structural posts, bottom and top rails, pickets, and decorative post caps. Further, the company acts as a licensor in various licensing agreements with third parties to manufacture and sell products under the Trex name, including Trex Outdoor Furniture; Trex RainEscape, an above joist deck drainage system; Trex Pergola, a cellular PVC product; Trex Latticeworks outdoor lattice boards; Trex Cornhole boards; Diablo Trex Blade, a saw blade for wood-alternative composite decking; Trex SpiralStairs and structural steel posts; and Trex Outdoor Kitchens, cabinetry, and Storage products. It sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe’s stores. Trex Company, Inc. was founded in 1996 and is headquartered in Winchester, Virginia.

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.