United
Technologies is an industrial conglomerate which manufacturers and services
aircraft engines (Pratt & Whitney), manufacturers heating, ventilating and
air conditioning equipment (Carrier), manufacturers and services elevators
(Otis), builds helicopters (Sikorsky), manufacturers aerospace and industrial
products (Hamilton Sundstrand) and provides security and fire protection
services (UTC Fire and Security). The
company has earned an 18-20% return on equity over the last ten years while
growing profits and dividends at a 10-15% rate.
While UTX ’s businesses are
impacted by the global economic activity, the company has grown fairly
consistently returned because:
(1) its main businesses possess a large parts and
service component which adds stability to earnings,
(2) the
diversity of its product line allows for consistency in revenue and earnings
performance,
(3) its strong
cash flow allows for further acquisitions and product innovation.
Negatives:
(1) a
significant portion of its business is subject to government funding,
(2) its
international operations are subject changes in foreign economies growth rates
as well as currency fluctuations and government regulations,
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Debt/ EPS Down Net Value Line
Equity ROE Since 2004 Margin Rating
*Because the
market segments in which these companies operate are so diverse, comparable
data would be meaningless.
Chart
Note:
UTX stock made great progress off its March 2009 low, surpassing the downtrend off
its October 2007 high (straight red line) and the November 2008 trading high
(green line). Long term it is in an
uptrend (blue lines). Intermediate term
it is in an uptrend (purple lines).
Short term it is in an uptrend (brown line). The wiggly red line is the 50 day moving
average. The Dividend Growth Portfolio
owns a 75% position in UTX. The upper boundary
of its Buy Value Range is $76; the lower boundary of its Sell Half Range is
$143.
4/14
No comments:
Post a Comment