A Great Holding For The Long-Term Income Investor
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Dow giant and conglomerate United Technologies (NYSE: UTX) is a company worth owning for the long-term income investor looking for relatively consistent growth, a secure dividend, and stability in this currently unstable world economy. UTX unsurprisingly this past Wednesday, Jan. 25, reported another solid quarter coming in with a $1.47/share, a penny better than consensus estimates, and revenue that pretty much matched estimates at approximately $15 billion. Moreover, the company’s guidance going forward is encouraging expecting a 2012 profit of $5.80-$6/share against consensus estimates of only $5.64/share further assuring investors that UTX will deliver once again. Another growth driver going forward should be the completion of the Goodrich (NYSE: GR) acquisition (which as a friendly reminder was a $127.50 all-cash offer made back in Sept. 2011 and now left for the arbitrageurs) by the middle of 2012 according to the quarterly statement. On a valuation basis, UTX trades at a reasonable 14.1x trailing P/E, 11.5x forward P/E, 1.2x P/S and PEG, 1.3x EV/S, and a consistently growing 2.5% dividend yield. At just a 34% payout ratio, an investor can reasonably assume that the multi-decade long dividend increase streak should remain intact in the coming years and makes it a very “Foolish (capital F)” and high quality holding.
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