NYSE:UTX

Stock Analysis Report

Executive Summary

United Technologies Corporation provides technology products and services to the building systems and aerospace industries worldwide.

Rewards

Trading at 24% below its fair value

Earnings are forecast to grow 11.16% per year

Pays a high and reliable dividend of 1.95%

Risk Analysis

Has a high level of debt

Shareholders have been diluted in the past year



Snowflake Analysis

Established dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has United Technologies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: UTX has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.6%

UTX

-0.6%

US Aerospace & Defense

0.5%

US Market


1 Year Return

19.3%

UTX

24.8%

US Aerospace & Defense

20.3%

US Market

Return vs Industry: UTX underperformed the US Aerospace & Defense industry which returned 24.8% over the past year.

Return vs Market: UTX underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

UTXIndustryMarket
7 Day-1.6%-0.6%0.5%
30 Day-2.5%0.6%2.0%
90 Day2.0%6.3%9.4%
1 Year21.8%19.3%27.0%24.8%22.8%20.3%
3 Year43.7%34.4%52.9%44.8%50.1%40.4%
5 Year38.1%22.8%91.7%73.7%73.1%54.1%

Price Volatility Vs. Market

How volatile is United Technologies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is United Technologies undervalued compared to its fair value and its price relative to the market?

24.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: UTX ($150.68) is trading below our estimate of fair value ($198.3)

Significantly Below Fair Value: UTX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: UTX is poor value based on its PE Ratio (23.3x) compared to the Aerospace & Defense industry average (20.8x).

PE vs Market: UTX is poor value based on its PE Ratio (23.3x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: UTX is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: UTX is overvalued based on its PB Ratio (3.1x) compared to the US Aerospace & Defense industry average (2.8x).


Next Steps

Future Growth

How is United Technologies forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

11.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: UTX's forecast earnings growth (11.2% per year) is above the savings rate (1.7%).

Earnings vs Market: UTX's earnings (11.2% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: UTX's earnings are forecast to grow, but not significantly.

Revenue vs Market: UTX's revenue (3.8% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: UTX's revenue (3.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: UTX's Return on Equity is forecast to be low in 3 years time (18.4%).


Next Steps

Past Performance

How has United Technologies performed over the past 5 years?

-0.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UTX has high quality earnings.

Growing Profit Margin: UTX's current net profit margins (7.2%) are lower than last year (7.9%).


Past Earnings Growth Analysis

Earnings Trend: UTX's earnings have declined by -0.3% per year over the past 5 years.

Accelerating Growth: UTX's earnings growth over the past year (5.1%) exceeds its 5-year average (-0.3% per year).

Earnings vs Industry: UTX earnings growth over the past year (5.1%) underperformed the Aerospace & Defense industry 10.8%.


Return on Equity

High ROE: UTX's Return on Equity (13.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is United Technologies's financial position?


Financial Position Analysis

Short Term Liabilities: UTX's short term assets ($37.5B) exceed its short term liabilities ($34.6B).

Long Term Liabilities: UTX's short term assets ($37.5B) do not cover its long term liabilities ($60.8B).


Debt to Equity History and Analysis

Debt Level: UTX's debt to equity ratio (98.3%) is considered high.

Reducing Debt: UTX's debt to equity ratio has increased from 60.4% to 98.3% over the past 5 years.

Debt Coverage: UTX's debt is well covered by operating cash flow (20.4%).

Interest Coverage: UTX's interest payments on its debt are well covered by EBIT (6.4x coverage).


Balance Sheet

Inventory Level: UTX has a low level of unsold assets or inventory.

Debt Coverage by Assets: UTX's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is United Technologies's current dividend yield, its reliability and sustainability?

1.95%

Current Dividend Yield


Dividend Yield vs Market

company2.0%marketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: UTX's dividend (1.95%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: UTX's dividend (1.95%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: UTX's dividends per share have been stable in the past 10 years.

Growing Dividend: UTX's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (45.4%), UTX's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: UTX's dividends in 3 years are forecast to be well covered by earnings (32% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

0.7yrs

Average management tenure


CEO

Greg Hayes (58yo)

5.3yrs

Tenure

US$18,418,315

Compensation

Mr. Gregory J. Hayes, also known as Greg, has been the Chief Executive Officer and President at United Technologies Corporation since November 23, 2014 and has been its Chairman of the Board since Septembe ...


CEO Compensation Analysis

Compensation vs Market: Greg's total compensation ($USD18.42M) is above average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: Greg's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Gregory Hayes
Chairman5.3yrsUS$18.42m0.024% $31.0m
Akhil Johri
Executive Vice President0.3yrsUS$6.45m0.0050% $6.5m
Judith Marks
President & CEO of Otis0.7yrsUS$6.51m0.000010% $12.9k
Neil Mitchill
Acting Senior VP & Chief Financial Officer0.3yrsno data0.00097% $1.3m
Michael Dumais
Executive VP of Operations & Strategy3.1yrsno data0.0037% $4.7m
Robin Diamonte
Chief Investment Officer & VP of Pension Investments0yrsno datano data
Nicolas Pujet
Interim Chief Technology Officer0.4yrsno datano data
Carroll Lane
Vice President of Investor Relations0yrsno datano data
Charles Gill
Executive VP & General Counsel12.8yrsUS$4.47m0.0066% $8.5m
Christopher McDavid
Corporate Vice President of Global Ethics & Compliances0yrsno datano data

0.7yrs

Average Tenure

55yo

Average Age

Experienced Management: UTX's management team is not considered experienced ( 0.7 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Gregory Hayes
Chairman5.3yrsUS$18.42m0.024% $31.0m
Marshall Larsen
Independent Director7.4yrsUS$331.24k0.00063% $813.0k
John Faraci
Independent Director14.2yrsUS$326.24kno data
Harold McGraw
Independent Director16.2yrsUS$301.24k0.00042% $542.0k
Brian Rogers
Independent Director4.1yrsUS$326.24k0.00058% $748.5k
Jean-Pierre Garnier
Independent Director23.1yrsUS$326.24k0.0021% $2.7m
Fredric Reynolds
Independent Director4.1yrsUS$341.24k0.0026% $3.3m
Ellen Kullman
Lead Director0yrsUS$381.24kno data
David Gitlin
Director0.2yrsUS$6.44m0.0025% $3.3m
Lloyd Austin
Independent Director3.4yrsUS$336.24kno data

4.1yrs

Average Tenure

66.5yo

Average Age

Experienced Board: UTX's board of directors are considered experienced (4.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: UTX insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6.8%.


Top Shareholders

Company Information

United Technologies Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: United Technologies Corporation
  • Ticker: UTX
  • Exchange: NYSE
  • Founded: 1934
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: US$129.052b
  • Shares outstanding: 856.47m
  • Website: https://www.utc.com

Number of Employees


Location

  • United Technologies Corporation
  • 10 Farm Springs Road
  • Farmington
  • Connecticut
  • 6032
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
UTXNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
UTC1DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0R2NLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
UTX *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
UTC1XTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
UTXSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
UTXETLX (Eurotlx)YesCommon StockITEURJan 1968
UTXWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
UTXBASE (Buenos Aires Stock Exchange)CEDEARS EACH REP 1/5 COM USD1 (USD)ARARSJul 2001
UTEC34BOVESPA (Bolsa de Valores de Sao Paulo)EACH BDR REPR 1 COM USD1BRBRLDec 2014

Biography

United Technologies Corporation provides technology products and services to the building systems and aerospace industries worldwide. It offers passenger and freight elevators, escalators, and moving walkways; modernization products to upgrade elevators and escalators; and maintenance and repair services. The company also provides building systems, including cooling, heating, ventilation, refrigeration, fire, flame, gas, smoke detection, portable fire extinguishers, fire suppression, intruder alarms, access control systems, video surveillance, and building control systems; and building services, such as audit, design, installation, system integration, repair, maintenance, and monitoring. In addition, it supplies aircraft engines for commercial, military, business jet, and general aviation markets; and provides aftermarket maintenance, repair, and overhaul, as well as fleet management services. Additionally, the company offers electric power generation, power management, and distribution systems; air data and aircraft sensing systems; engine control, intelligence, surveillance, and reconnaissance systems; engine components; environmental control systems; fire and ice detection, and protection systems; propeller systems; engine nacelle systems; aircraft lighting, seating, and cargo systems; actuation and landing systems; space products and subsystems; avionics systems; precision targeting; electronic warfare and range systems; flight controls, communications, navigation, oxygen, and simulation and training systems; food and beverage preparation, and storage and galley systems; and lavatory and wastewater management systems. It provides its services through sales representatives, building contractors and owners, transportation companies and retail stores, and through joint ventures, independent sales representatives, distributors, wholesalers, and dealers. United Technologies Corporation was incorporated in 1934 and is headquartered in Farmington, Connecticut. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 01:52
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.