United Technologies (NYSE:UTX)

United Technologies Corporation is an American conglomerate founded in 1929 and based in Hartford, Connecticut. In 2008, the group employed more than 206,700 people worldwide. 67,133 of the positions are located outside the United States (source Wikipedia). While the company is not very well known to the general public, everyone uses products of the conglomerate, consciously or not on a regular basis. United Technologies Corporation is an industrial group organized around five sectors of activity: climate engineering, aeronautics, elevators/escalators, air navigation systems and security.

In climate engineering, we find the Carrier company, 1^er global producer of heating, ventilation, refrigeration and air conditioning systems for industrial and domestic use. It was as early as 1902 that Dr. Willis H. Carrier invented and manufactured the world's first modern air conditioner.

In aeronautics, the Pratt & Whitney company designs and manufactures civil and military aircraft engines, gas turbines, rocket engines and propulsion systems. Pratt & Whitney is world leader in aerospace, present in 195 countries, for 10,000 aircraft operators.

For the elevator, escalator and moving walkway sector, we find the famous Otis brand, World No. 1 in the manufacture, installation and maintenance of lifting systems. Otis is a global company. It offers its products in more than 200 countries and has production units in the Americas, Europe, Asia and Australia and research and development centers in the United States, Germany, Spain, France and Japan. Otis is also the first transporter for a billion passengers per day in the world, with 2.1 million elevators and 130,000 escalators in operation. Steam elevators and hydraulic elevators were invented in 1850, but it was in 1853 that the history of the elevator really began, when Elisha Graves Otis designed the first elevator equipped with a parachute system for total safety.. Elisha Graves Otis' invention in 1853 gave rise to skyscrapers, modern architecture, the rise of urban metropolises, and the elevator industry. Otis was acquired in 1976 by United Technologies.

In the air navigation systems, we find the companies Hamilton Sundstrand and Sikorsky which manufacture electrical, electronic and mechanical systems for aircraft (compressors, air traffic control, etc.), civil and military helicopters, etc. Sikorsky is an American manufacturer of aircraft and helicopters. The company was founded in 1923 by the Ukrainian-born American aeronautical engineer Igor Sikorsky, who designed the first stable helicopter with a single main rotor plus tail rotor to be produced on a large scale in 1942.

In security, we find UTC Fire & Security which integrates and installs security systems (intrusion alarms, access control and video surveillance systems) and fire detection and protection systems. It should also be noted that United Technologies also works on the development of new energies such as fuel cells.

UTX thus provides access to several global industrial leaders. The conglomerate has beaten the market between 1980 and today, posting a nice performance of 3'000%. Note that the title shone especially during the famous "lost decade" 2000-2010, bouncing back perfectly after the two bear markets following the techno bubble and subprimes. In return, the PER went from less than 10 in 2009 to 17.90 to date, which is becoming a little high, in any case higher than the entire conglomerate sector.

The modest dividend yield of 2,29% gives us further confirmation of the stock's current fairly high valuation. UTX partly compensates for this shortcoming with good annual distribution growth of 12,72%. The conglomerate has been able to increase its dividend for 17 consecutive years. Despite these successive increases, the distribution ratio remains very cautious, at 35.65%, which leaves the conglomerate room to increase its dividend in the future, even in the event of a difficult passage. The next payment, which will take place on June 10, has also been increased by 14% (the stock has been trading ex-dividend since May 18).

With a techno sound and an industrial sector, one might think that United Technologies is a particularly nervous stock. However, the beta is identical to the market and CHF volatility is lower than that of the SMI, at 13.48%.

In summary, UTX is an interesting stock due to its diversification and good resistance to economic uncertainties. The dividend policy is prudent, but rewards long-term investors. On the other hand, the soaring price since 2009 makes the stock too expensive to buy at present. The good fundamentals and the margin for growth in distributions make it a title to keep if we already have it in our portfolio.