UTX  United Technologies Corporatio...

Exchange

NYSE

Sector

Capital Goods

Industry

Aerospace

Market Cap.

90.33B

Vuru Grade

49.56/100

Current Price

$112.09
-0.57 (-0.51%)

Growth Price

$47.41
Overvalued by 57.70%

Stability Price

$21.26
Overvalued by 81.03%

Company Metrics

  • P/E 18.32
  • P/S 1.59
  • P/B 3.30
  • EPS 6.12
  • Cash ROIC 6.49%
  • Cash Ratio 0.33
  • Dividend 2.64 / 2.35 %
  • Avg. Vol. 3.02M
  • Shares 805.87M
  • Market Cap. 90.33B

Company Description

United Technologies Corporation provides technology products and services to the building systems and aerospace industries worldwide. The company's Otis segment designs, manufactures, sells, and installs passenger and freight elevators, escalators, and moving walkways, as well as provides maintenance and repair services. Its Carrier segment offers heating, ventilating, air conditioning, and refrig... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

United Technologies Announces Secondary Offering of its Position in Watsco ...
PR Newswire (press release) - 13 hours ago
23, 2017 /PRNewswire/ -- United Technologies Corp. (NYSE: UTX) announced today the commencement of an underwritten secondary offering of 4,235,685 shares of common stock of Watsco, Inc. (NYSE: WSO).
Better Buy: Caterpillar Inc. vs. United Technologies
Motley Fool - Feb 22, 2017
It's always interesting to compare stocks like Caterpillar Inc. (NYSE:CAT) and United Technologies Corporation (NYSE:UTX).
United Technologies Corporation (UTX) Closes 0.51% Down on the Day for February 23
Equities.com - 12 hours ago
Shares of United Technologies Corporation (UTX) ended the trading day Thursday at $112.09, representing a move of -0.51%, or $0.57 per share, on volume of 3.46 million shares.
Earnings Guidance on United Technologies Corporation(UTX) - Energy Index
Vetr Inc. Downgrades United Technologies Corporation (UTX) to Hold - Chaffey Breeze
United Technologies - Another Company Making Huge Share Buybacks
Seeking Alpha - Feb 17, 2017
United Technologies Corporation (NYSE: UTX) released its Q4 2016 and FY2016 results and affirmed its 2017 Outlook on January 25, 2017.
Is United Technologies on Track to Deliver Long-Term Value?
Motley Fool - Feb 16, 2017
The investment case for buying stock in United Technologies Corporation (NYSE:UTX) in 2017 isn't really based on its near-term earnings potential, but rather the successful execution of its ongoing plans to transition the company toward long-term growth.
EOD Risers: United Technologies Corporation, Verizon Communications Inc., Wal ...
DirectorsTalk Interviews - Feb 23, 2017
The trading price for United Technologies Corporation found using EPIC: (NYSE:UTX) a company engaged in providing high technology products and services to the building systems and aerospace industries around the world, gained 0.14% or 0.16 points ...
What United Technologies Needs
Seeking Alpha - Jan 27, 2017
You may recall my buy rating on United Technologies (NYSE:UTX) after poor quarterly reports in October 2015 and January 2016.
United Technologies Corporation (UTX) Ex-Dividend Date Scheduled for February ...
Nasdaq - Feb 14, 2017
United Technologies Corporation ( UTX ) will begin trading ex-dividend on February 15, 2017. A cash dividend payment of $0.66 per share is scheduled to be paid on March 10, 2017.
United Technologies Corporation (UTX) Closes 0.9% Up on the Day for February 15 - Equities.com
Is United Technologies Corporation (NYSE:UTX) a Low Risk Buy? - Library For Smart Investors
United Technologies (UTX) Q4 Earnings Match, Affirms View
Zacks.com - Jan 25, 2017
Adjusted revenues at UTC Climate Controls & Security were $4,249 million, up 3.1% from $4,122 million in the year-ago quarter.
United Technologies Keeps Outlook Unchanged Following Mixed Q4 Results - ETF Daily News (blog)
Heard on United Tech's conference call - Seeking Alpha
United Technologies Corporation (UTX) Stock Heads Lower After Q4 Earnings
Investorplace.com - Jan 25, 2017
Revenue reported by United Technologies Corporation in the fourth quarter of 2016 was $14.66 billion. Revenue reported by UTX during the same time last year was $14.30 billion.
United Technologies Corporation (UTX) Moves Lower on Volume Spike for January 25 - Equities.com
United Technologies Corporation (UTX) Releases Earnings Results, Reports EPS ... - Highland Mirror
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for UTX to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate UTX's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$112.09 Current Price

$47.41 Growth Price (DCF)

Overvalued by 57.70%


Growth Rate Assumed by Market: 40.78%


Future Free Cash Flow Growth Rate: -2.1%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$21.26 Stability Price (EPV)

Overvalued by 81.03%


Discount Rate: 15.0%

$106.49 Book Price

Fairly valued


Poor Cash Return on Invested Capital over the past 5 years

UTX has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

UTX has only created $6.49 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 3.71B 5.10B 5.03B 4.24B 1.79B
divided by
Invested Capital 60.80B 63.18B 63.16B 57.79B 60.64B
Cash ROIC 6.11% 8.06% 7.97% 7.33% 2.96%

Excellent Return on Equity over the past 5 years

Over the past 5 years, UTX has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

UTX has generated $19.20 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 5.20B 6.07B 6.62B 4.36B 5.44B
divided by
Stockholders' Equity 25.91B 31.87B 31.21B 27.36B 27.58B
Return on Equity 20.07% 19.06% 21.22% 15.92% 19.71%

Excellent Business Performance over the past 10 years

UTX has been able to maintain profitability in good times and bad. This could mean UTX has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

UTX has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 4.18B 4.95B 4.53B 5.04B 5.61B 3.71B 5.10B 5.03B 4.24B 1.79B

Weak Balance Sheet

UTX's financial position is not ideal. The key is to check whether UTX is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 2.90B 4.33B 4.45B 4.08B 5.96B 4.82B 4.62B 5.24B 7.08B 7.16B
Current Assets 22.07B 24.10B 23.19B 23.51B 25.76B 29.61B 29.44B 29.76B 26.71B 28.55B
Total Assets 54.58B 56.47B 55.76B 58.49B 61.45B 89.41B 90.59B 91.29B 87.48B 89.71B
Current Liabilities 17.47B 19.43B 17.91B 17.73B 18.62B 23.79B 22.80B 22.90B 22.62B 21.91B
Total Liabilities 33.22B 40.55B 35.70B 37.11B 39.57B 63.50B 58.73B 60.08B 60.13B 62.13B
Stockholder' Equity 21.36B 15.92B 20.07B 21.39B 21.88B 25.91B 31.87B 31.21B 27.36B 27.58B
Current Ratio 1.26 1.24 1.29 1.33 1.38 1.24 1.29 1.30 1.18 1.30
TL-to-TA 0.61 0.72 0.64 0.63 0.64 0.71 0.65 0.66 0.69 0.69

Consistent Reinvestment of Profits over the past 10 years

UTX has consistently retained profits. This may put UTX in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, UTX can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 21.75B 25.16B 27.40B 30.19B 33.49B 36.78B 40.54B 44.61B 49.96B 52.87B
Retained Earnings Growth - 15.67% 8.89% 10.20% 10.92% 9.82% 10.23% 10.04% 11.98% 5.84%

Competitive Industry over the past 10 years

UTX is likely operating in an industry with medium to low barriers to entry. This may mean that UTX doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that UTX invests heavily in R&D and Sales, General & Administrative expenses.

Only $8.57 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 4.22B 4.69B 3.83B 4.37B 4.98B 5.20B 6.07B 6.62B 4.36B 5.44B
divided by
Revenue 54.76B 58.68B 52.92B 54.33B 58.19B 57.71B 62.63B 65.10B 56.10B 57.24B
Net Profit Margin 7.71% 7.99% 7.24% 8.05% 8.56% 9.01% 9.70% 10.17% 7.76% 9.50%

Inconsistent Gross Profit Margins over the past 10 years

UTX has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$34.22 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 14.84B 16.12B 14.06B 14.91B 56.13B 15.56B 17.31B 17.65B 15.67B 15.78B
divided by
Revenue 54.76B 58.68B 52.92B 54.33B 58.19B 57.71B 62.63B 65.10B 56.10B 57.24B
Gross Margin 27.10% 27.47% 26.57% 27.45% 96.46% 26.95% 27.63% 27.12% 27.93% 27.57%

Medium Capital Intensity over the past 10 years

UTX has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

33.15% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 1.15B 1.22B 826.00M 865.00M 983.00M 2.93B 2.41B 2.30B 2.09B 2.09B
divided by
Net Income 4.22B 4.69B 3.83B 4.37B 4.98B 5.20B 6.07B 6.62B 4.36B 5.44B
Capital Expenditure Ratio 27.30% 25.93% 21.57% 19.78% 19.74% 56.38% 39.68% 34.79% 47.96% 38.39%

Very Strong Dividend History over the past 10 years

UTX has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests UTX is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 1.08B 1.21B 1.36B 1.48B 1.60B 1.75B 1.91B 2.05B 2.18B 2.07B
divided by
Shares Outstanding 989.23M 956.00M 929.00M 922.70M 906.80M 906.60M 915.10M 911.60M 883.20M 826.10M
Dividend Paid Per Share 1.09 1.27 1.46 1.61 1.77 1.93 2.09 2.25 2.47 2.50
Price at Year End 69.42 48.91 66.86 76.60 72.68 80.81 112.73 116.20 96.90 109.62
Dividend Yield 1.57% 2.59% 2.18% 2.10% 2.43% 2.39% 1.85% 1.93% 2.55% 2.28%

Strong History of Stock Buybacks over the past 10 years

UTX has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 989.23M 956.00M 929.00M 922.70M 906.80M 906.60M 915.10M 911.60M 883.20M 826.10M
Stock Bought Back - 3.48% 2.91% 0.68% 1.75% 0.02% -0.93% 0.38% 3.22% 6.91%
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