Yahoo Finance United Technologies-Middleby Ink Deal for Taylor Company Sale
United Technologies Corporation’s UTX operating segment — Climate, Controls & Security — recently entered into a definitive agreement with The Middleby Corporation MIDD. Per the deal, this segment will sell Taylor Company to Middleby — a manufacturer of commercial foodservice equipment. This $1 billion deal is expected to close early in the third quarter of 2018.
Our Take
United Technologies serves various end-markets such as aerospace, defense and commercial construction. This business mix and diversification allows the company to generate profit even during tough economic times by delivering consistent earnings and dividend growth. Also, the company’s continuous investment in innovative products, through higher engineering expenditures, secures orders that might drive the top line in future.
In the past six months, shares of United Technologies have gained 7.2% against the industry’s decline of 6.2%.
Moreover, the company’s strong aftermarket services business remains relatively stable compared to new product delivery. This, in turn, helps United Technologies to offset the impact of downturns in the new products market. For instance, in first-quarter 2018, its aftermarket business witnessed robust sales across the segments with commercial and military up 18% and 13%, respectively.
Meanwhile, the company also revamped its aerospace unit, including an overhaul of its organizational structure. Per United Technologies, its streamlined organizational set-up might enable the company to better serve its customers.
However, the Zacks Rank #3 (Hold) company relies on suppliers, including third-party contract manufacturing and commodity markets, to secure raw materials, parts, components and sub-systems. Therefore, any disruption in deliveries from suppliers, capacity constraints, production disruptions, price changes, or decreased availability of raw materials or commodities may adversely impact United Technologies’ ability to meet delivery schedules and increase operating costs.
Stocks to Consider
Some better-ranked stocks from the same space are Honeywell International Inc. HON and Danaher Corporation DHR. Both these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Honeywell surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 1.5%.
Danaher exceeded estimates in the trailing four quarters, with an average positive earnings surprise of 4.1%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Danaher Corporation (DHR) : Free Stock Analysis Report
Honeywell International Inc. (HON) : Free Stock Analysis Report
United Technologies Corporation (UTX) : Free Stock Analysis Report
The Middleby Corporation (MIDD) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
