UTX Stock Report

2-Year Price History

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Ockham's Rating

UTX Revenue

As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, UTX the high and low end of the Price to Sales per share ratios are 1.36x and 0.93x respectively.

Notice that UTX's current Price to Sales per share ratio is 0.79x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $50.24, UTX is 32% below where we would expect to see it. This will beneficially factor into our final analysis of UTX as it is not often that this stock sinks to these levels.

UTX Cash Earnings

As the old saying goes, "Cash is King!" However, we prefer to capture a few other items within our analysis to identify "cash earnings". Nevertheless, an analysis of Cash Earnings is absolutely pivotal to assessing a company's value, and currently UTX is significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for UTX, the current level of Cash Earnings compared to its historical levels helps identify where UTX is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 13.40 and a historical low Cash Earnings per share ratio of 9.23, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for UTX? From the Ockham perspective, we are looking specifically at UTX to see if the market is recognizing the huge disparity between UTX's past stock price to Cash Earnings ratio to today's levels. At a difference of 28% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at UTX. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

UTX Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for UTX to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for UTX is $1.54 producing a current dividend yield of 3.07%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from UTX against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from UTX over previous years was 4.12% while the lowest dividend yield was 1.03%. UTX’s current dividend yield is therefore significantly higher than its median dividend yield historically. In fact, the current yield is 19.22% above the median which weighs very positively on our analysis of UTX.