Recent Buy: September 12th, 2014

United-TechnologiesI continued to diversify my portfolio when I initiated a position in United Technologies (UTX) on Friday.  I’m now a shareholder in 17 companies.  I bought 14 shares for $108.21 each with a $6.95 commision for a total transaction amount of $1521.89.   The trailing 12-month P/E is 17.5, and the forward one year P/E is 14.4.  My initial dividend yield is 2.18%, compared to the 5 year average of 2.30%, and this purchase adds $33.04 to my annual forward dividends for a new 12 month total of $1,064.71.

United Technologies is a high-technology products and services company in the global aerospace and building systems industries.  Each of their business segments are highly diversified.   They have a solid competitive hand in so many areas: elevators, escalators, fire safety, security, building automation, heating, ventilation, air conditioning, refrigeration, military and commercial engines, aircraft engines, advanced helicopters, auxiliary and ground power units, small turbojet propulsion products and more.  Nearly all of today’s aircraft rely on their systems and components.

They’ve been raising dividends for 19 years; however, like one my other industrial holdings John Deere (DE), they don’t raise them exactly every 4 quarters.  Earnings per share has grown strong over the last decade as the company continues to grow organically and through acquisitions.  Revenue climbed from $37,445 USD Mil in 2004 to $62,626 USD Mil in 2013.  The 5 year dividend growth rate is 8.92%, and the current payout ratio is 37%.

Competitors include Boeing (BA), and General Electric (GE).  I want to own GE eventually, and will most likely start a position soon, but I decided to get on board with UTX first.  I’ve attached fast graphs of UTX and GE for comparison.  For my settings, I selected a 21 year history and opted to reinvest dividends with an original investment of $1521.89.

I’ve also enjoyed a few articles on UTX lately:

Dividend Growth Investor posted a great write up over at Seeking Alpha called, “United Technologies: A Diversified Dividend Powerhouse To Consider.

The Motley Fool posted an article called, “5 Things United Technologies Corporation’s Management Wants You to Know.

What do you think of UTX vs GE?  What’s on your watchlist lately?

fastgraphs_september_utx

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fastgraphs_september_utx3

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fastgraphs_september_utx4

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My Dividend Growth

http://www.mydividendgrowth.com

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18 thoughts on “Recent Buy: September 12th, 2014
  1. writing2reality

    Nice addition to the portfolio here, given some nice added diversification. You’ve really built a well-rounded portfolio so far this year. Next year will be pretty exciting now that all of these acquisition have given you a strong base in which to leverage going forward.

     
    Reply
    1. My Dividend Growth

      W2R,

      Thank you much! I’m really enjoying the process so far and have been super lucky to spread out into so many companies this quickly. The more the better for my small portfolio just in case something happens to my income. Hopefully we’ll continue to find investing opportunities with Mr. Market.

      Wishing you the best!
      Ryan

       
      Reply
  2. Dividend Mantra

    Ryan,

    Great move here. I think UTX is a fantastic company. And they’ve been incredibly consistent over a long period of time. Gotta love that chart showing earnings and dividends smoothly moving upward. Definitely compares well to GE’s roller coaster performance over that same time period.

    I personally like both companies, and while there is some overlap (mainly jet engines through UTX’s Pratt & Whitney) I think I’ll have room for both one day.

    Nice job diversifying the portfolio. You’re building a nice little snowball over here. 🙂

    Keep up the great work!

    Best regards.

     
    Reply
    1. My Dividend Growth

      Jason,

      Thanks for the support on this one. I love how the charts make it all so easy to see. I’ll be so curious to read if you go with UTX for one of your few remaining companies, I can’t believe you’re almost to 50! It’s crazy GE was so overvalued during the dot-com bubble, even the expensive dividend stocks of today aren’t nearly that bad. I’m with you that GE’s recent challenges are a small hiccup along the way. I like the bigger yield too. Ultimately, I’m pretty sure GE will be my next purchase and I’m excited to own both with you.

      Have a great week!
      Ryan

       
      Reply
  3. roadmap2retire

    UTX is a great conglomerate to own. I looked at it a couple of months ago and ended up with GE instead as it was more attractively priced and I liked where GE is headed. But over the long run, both GE and UTX will be great holdings for my portfolio – and yours too.

    Best wishes
    R2R

     
    Reply
    1. My Dividend Growth

      R2R,

      I’m happy to hear you’re on the same page with UTX. I definitely agree that owning both is the best idea and I’m pretty sure GE will be my very next purchase. I’m hoping to get it under $26, but might bite a little higher. I like the yield and the forward P/E is very nice. Hopefully both companies stay fairly priced for a long while and we can both load up a bit. I appreciate the comment!

      Wishing you the best!
      Ryan

       
      Reply
  4. Dividend Growth Journey

    Nice purchase Ryan. I already hold GE and it is already the largest in my portfolio. That is one reason I have not initiated a position in UTX with its overlap in GE. Hopefully as I expand my portfolio into other sectors, I will get into UTX once GE’s weight has come down.

     
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    1. My Dividend Growth

      DGJ,

      Great to hear from you. Isn’t it great how many fantastic companies there are to choose from? Love your monster position in GE, I’m hoping to join you very soon if prices can stay attractive.

      Wishing you the best,
      Ryan

       
      Reply
  5. Retire Before Dad

    MDG,
    I looked at UTX last week for my Parker Hannifin post. I was surprised at the current valuation and DG over the past 10-20 years. These kind of diversified industrial companies fit great into a DG portfolio.
    -RBD

     
    Reply
    1. My Dividend Growth

      RBD,
      Thanks for the comment. I really liked your purchase of PH, which I hadn’t researched much before your great post. I completely agree about these behind the scenes companies and I’m planning on making them a big part of my portfolio. Hope all is well with you!
      Best wishes,
      Ryan

       
      Reply
  6. Special Agent Dividend

    UTX is a very broad company, as you mentioned, and I think will serve you well for years to come. I’ve seen one of their plants, specifically an aerospace one, based in Decatur, AL. Solid purchase and thanks for sharing.

     
    Reply
    1. My Dividend Growth

      Special Agent Dividend,

      Thank you for the support. I do love the variety of services and products this company offers. I think it would so fun to see one of the plants, maybe they convinced you to invest? I’ll have to wait and see 🙂

      Appreciate you stopping by,
      Ryan

       
      Reply
  7. Dividend Gremlin

    Ryan,

    UTX is a solid buy. That kind of technology company, away from the MSFTs and AAPLs of the world, may not seem as flashy or cool to the general public, but man does it get stuff done.

    I own GE, who have been playing commercials now for some time on television, so perhaps the general electronics and military suppliers are starting to come back into the public focus. As DMantra pointed out above they do have cross over, especially in their engine production. It will be interesting to see how the US and other armies spend their cash in the next few years with recent events really heating up. The emphasis has been mostly on better technology, but just yesterday I heard the A-10 (low-tech) Warthog may make a come back to fill the need for a close range air support. Living in the DC area this stuff is on the news perhaps more frequently. Also having seen the AF Bases nearby, I must say those F-16s sound awesome when taking off at full throttle – and they are the small birds in the local inventory.

    Keep up the good work,

    – Gremlin
    Long GE, MSFT, AAPL

     
    Reply
    1. My Dividend Growth

      DG,

      Great to hear from you. I’m with you and absolutely love these industrial companies, especially ones with a history like UTX. I’ll be joining you as a shareholder in GE very soon. It’s top 5 on my watchlist and I’m ready to pull the trigger any day now.

      I haven’t seen much news like that in LA, but I would love to hear more of it. Less than two hours away is San Diego and they have the huge military base and population. I really appreciate you sharing that info, since UTX gains about 20% of revenue from the government, I’m very interested in defense spending now 🙂 I read some interesting articles about how GE is avoiding a geared design for a new engine while UTX continues advanced developments and with successful sales. I never thought I’d want to learn about aircraft engines but I love self directed investing for that reason. It makes me passionate about what these companies are doing and I love all the extra worldly knowledge. I very much appreciate your comment and thanks for the support!

      Best Wishes,
      Ryan

       
      Reply

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