America's Largest Helicopters May Be for Sale. But Should United Technologies Discard Its Crown Jewel?

Why United Technologies might sell its Sikorsky brand and America's largest helicopter -- the CH-53E Super Stallion.

Feb 2, 2014 at 5:45PM

Have you heard the news? United Technologies (NYSE:UTX) may soon sell or spin off its Sikorsky helicopter division.

Rumors of the whirlybird spinoff sparked heated debate among investors: Is it true that United Tech will unload one of its best-known brands? And if so, why? (And for how much?)

The answer to that last question is pretty easy. A true industrial conglomerate, United Technologies owns such valuable brands as Otis elevators, Carrier air conditioners, Pratt & Whitney engines -- and, of course, Sikorsky helicopters. As a whole, the company is valued at 1.65 times annual sales.

But historically, high-quality defense companies -- and United Technologies is the eighth biggest defense contractor in the world -- tend to sell for only about one-times their annual sales. With $6.2 billion in revenue recorded over the past year, a separate Sikorsky division would therefore probably be valued at about $6.2 billion -- a significant discount to the valuation of United Technologies as a whole. And this would be true whether Sikorsky is sold to an acquirer like Boeing (NYSE:BA), Textron (NYSE:TXT), or Britain's BAE Systems (NASDAQOTH:BAESY) -- or whether it gets spun off as an independent entity.

As for the other questions, though, those are a bit trickier. In the following slides, we'll lay out for you the pros and possible cons of a decision by United Technologies to unload Sikorsky. Read on, and prepare to be amazed -- and make sure to check out our special free report at the end. 

Let the other guy buy a "good" stock. You deserve a "better" stock.
There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Textron. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

Something big just happened

I don't know about you, but I always pay attention when one of the best growth investors in the world gives me a stock tip. Motley Fool co-founder David Gardner (whose growth-stock newsletter was rated #1 in the world by The Wall Street Journal)* and his brother, Motley Fool CEO Tom Gardner, just revealed two brand new stock recommendations moments ago. Together, they've tripled the stock market's return over 12+ years. And while timing isn't everything, the history of Tom and David's stock picks shows that it pays to get in early on their ideas.

Click here to be among the first people to hear about David and Tom's newest stock recommendations.

*"Look Who's on Top Now" appeared in The Wall Street Journal which references Hulbert's rankings of the best performing stock picking newsletters over a 5-year period from 2008-2013.

Compare Brokers