On Sep 30, we issued an updated research report on United Technologies Corporation UTX.
We believe the company, which enjoys a strong foothold across markets, has several growth drivers. Read on to find out the key catalysts at the moment.
Existing Scenario
United Technologies is well positioned to gain from strength in commercial aftermarket and military businesses. Prospects of the company's aerospace business look promising on the back of high defense spending and strong orders in the United States. In addition, robust orders for the company’s Geared Turbofan engines are likely to boost revenues of its aerospace business. For 2019, it anticipates total revenues to be within the $75.5-$77 billion range, higher than $66.5 billion generated in 2018.
Also, United Technologies remains focused on investing across aerospace products portfolio to retain its position in the competitive market. Notably, its major peers in the aerospace market include General Electric Company GE, Honeywell International Inc. HON and 3M Company MMM.
Moreover, the company’s policy of acquiring accretive businesses provides a competitive edge over it peers. In this regard, the buyout of Rockwell Collins (completed in November 2018) is worth mentioning. Notably, this deal has not only strengthened United Technologies’ existing product portfolio but has also helped it in launching innovative solutions for aerospace customers. As a matter of fact, the company anticipates about 50 cents of accretion to adjusted earnings per share from this acquisition in 2019.
In addition, United Technologies remains committed to rewarding shareholders handsomely through dividend payments and share buybacks. For instance, in the second quarter of 2019, the company paid out dividends worth $610 million to shareholders and repurchased approximately shares worth $40 million. It is worth noting that the quarterly dividend rate was hiked 5% in October 2018. Such diligent capital deployment strategies boost shareholders' wealth.
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