United Technologies is a buy

logo utx

 

This company could be a good ad on to your portfolio, if you are looking for a diversified and well managed company in the commercial aerospace sector.

What is the business about?

UTX 1UTX 2UTX3UTX 4

what about the investor metrics 

I like the dividend graph and so should you….

utx 6

 

Now let’s dig in the numbers

 

Sales are growing

sales growth utx

 

Net income and Earnings per share are less impressive but they have just announced an increased outlook for future quarters.

EPS 55

 

let’s look at the share outstanding, it is stable which is a neutral they don’t have a huge buyback to help future Earning per share results.

shares outstanding

What is the economic Moat?

  1. This company has been developing their expertise for decades with customers, suppliers, and the Brand name is well established.
  2. This area is very sophisticated and it is not easy to switch providers like deciding to buy a pair of jeans elsewhere = fairly low competition should help them maintain margins.

What about the price to earnings multiple?

As you can see below it’s not exactly cheap valuation historically, but it is hard to say when it will go back to 10…. and in a long time horizon it will not make a sizeable difference.

 

valuation utx.PNG

 

 

Overall this is a good company for the long run, you can easily get 10% annualized return on your investment over 10 to 20 years period.

 

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