Perhaps it makes sense that United Technologies
Third-quarter results continue to reflect a mix of organic growth and accretive acquisitions. Revenue rose 17% as reported; organic growth made up a bit more than a third of that. Revenue was generally strong across the board, with only the Sikorsky business not showing positive top-line comparisons to last year. Margins also improved a bit for the period and operating profits rose 22%. Interest expense was substantially higher, though, and net income growth declined to a still-solid 18% for the quarter.
While the Carrier business was a bit of a drag in the second quarter, it came back stronger this time around as the North American HVAC market perked up. In fact, all of the company's operating units posted positive operating growth. The Otis business continues to see good growth in China, while the Pratt & Whitney and Hamilton Sundstrand businesses are benefiting from ongoing improvements in the commercial aviation industry.
UTX continues to enjoy healthy cash flow growth while actively buying its own shares. Given its markets, the company would certainly benefit if the much-talked-about commercial building upswing takes root; those buildings will need escalators and HVAC systems. Likewise, ongoing strength in the aerospace business would be good news.
So what about the stock? It doesn't get the valuation accorded to Motley Fool Inside Value pick 3M
Either way, I generally think relative valuation is mostly a waste of time. I prefer to look at an individual company's earnings, cash flow, and valuation multiple prospects. By that standard, UTX still looks unloved. A big company with strong cash flow, solid market share, and a good price doesn't come by every day. Fools may want to dig deeper into this one.
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- Is United Technologies Underappreciated?