Foolish Forecast: United Tech's as Good as It Gets

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For 14 straight quarters, through boom and now bust, industrial conglomerate United Technologies (NYSE: UTX) has consistently stumped the Street with an uninterrupted string of "earnings beats." Tomorrow, the company faces its greatest test -- reporting in the midst of a market meltdown. Wanna bet they can't pull another rabbit out of the hat?

What analysts say:

• Buy, sell, or waffle? Eighteen analysts unanimously endorse the stock.
• Revenues. On average, they expect 9% quarterly revenue growth to $15.1 billion.
• Earnings. Profits are predicted to rise in tandem, up 9% to $1.32 per share.

What management says:
Why are analysts so bullish on UTC? The better question is: Why wouldn't they be? Up on Wall Street, a credit crisis has just caused the partial nationalization of JPMorgan Chase (NYSE: JPM) and Bank of America (NYSE: BAC), but UTC is having none of it. To the contrary, last week, management reassured investors that its "liquidity and free cash flow remain strong," and to prove it, upped the dividend a whopping 20%!

What management does:
Gross margins are steady-to-rising, operating profits, too, and on the bottom line, UTC is earning more per dollar of revenue today than it was a year ago -- more than rivals like Boeing (NYSE: BA) or Textron (NYSE: TXT).

Margins	3/07	6/07	9/07	12/07	3/08	6/08
Gross	27.4%	27.1%	27.1%	27.1%	27.3%	27.4%
Operating	13.2%	13.0%	13.1%	12.9%	13.2%	13.2%
Net	7.7%	7.5%	7.6%	7.7%	7.9%	7.8%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
As if all that weren't enough to get you feeling up on UTC, consider this: You know how management said its free cash flow is "strong"? It is. Free cash flow over the past four reported quarters totaled $4.5 billion -- three times what the company now promises to pay out in annual dividends. So as an income play, UTC is rock-solid.

And as an equity investment? The stock currently trades for just over 11 times its free cash flow. Analysts think it will continue growing those profits at just over 11% per year as well. This stock is about as fairly valued as these things get.

So let's see: Unanimous support on Wall Street, for a proven performer with a reliable dividend, selling for a fair price -- it really doesn't get any better than this.

Catch up on the latest UTC news with:

• United Tech: What Liquidity Crisis?
• United Tech Is a Happy Camper
• Clean Power With a Pinch of Salt
• United Tech's $12 Billion Crickets