Industrial titan United Technologies (NYSE:UTX) operates in two key business lines: building/industrial systems and aerospace/defense. That fairly broad product offering helps buffer it from industry-specific risks, but it also means the company faces the risks associated with a lack of focus.

In this brief video, Fool contributor Chuck Saletta walks through 2.5 reasons to consider holding on to United Technologies' stock despite those risks.

United Technologies became a selection for the real-money Inflation-Protected Income Growth portfolio in large part because it had a solid balance sheet, a well-covered and growing dividend, and a reasonable valuation. As the video explains, it still has a solid balance sheet (reason No. 1) and a well-covered and growing dividend (reason No. 2).

United Technologies' market capitalization is around $107 billion, having risen slightly past the iPIG portfolio's fair-value estimate of $100 billion (the half-reason). That's not high enough to require selling based on valuation, but it is high enough that the iPIG portfolio would not consider buying more shares at the current price.

What could go wrong?
Almost ironically, the fact that United Technologies is a fairly diversified company adds new risk even as that industry diversification dampens its exposure to any one sector's troubles. Consider the plight of fellow industrial titan General Electric (NYSE:GE). Prior to the recent financial crisis, General Electric leaned ever more heavily on its financial arm for profits, at the expense of losing focus on its core industrial business.

That worked fairly well for General Electric -- until it didn't. During the financial crisis, General Electric's financial arm got into deep trouble due in large part to its exposure to subprime mortgage lending. Problems like that knocked General Electric for a loop, forcing it to cut its dividend, lose its coveted AAA debt rating, and ultimately sent its shares into single digits before they hit rock bottom.

While United Technologies doesn't currently look like it's headed toward a similar fate, General Electric's saga does paint a cautionary tale of the risks that companies face when their executives get distracted from its core.

What United Technologies may be facing, though, is a slowdown in innovation that often comes with that more diffuse focus. For instance, searching for high-efficiency air conditioners on United Technologies' Carrier air conditioning site reveals units in the 20 to 21 SEER efficiency range. On competitor Lennox's (NYSE:LII) site, units reach a high of 26 SEER efficiency. That's substantially more efficient than Carrier's offerings.

Lennox's key business line is heating and cooling, which almost forces it to stay ahead of the curve on innovations like energy efficiency. Carrier will likely remain in business for quite some time, but its slower pace of energy efficiency innovation may be a symptom of the risk of distraction of being part of a multifaceted company like United Technologies.

To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, click here. To see the iPIG portfolio's online tracking spreadsheet, click here.

Chuck Saletta owns shares of General Electric Company and United Technologies. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.