A company is a limited liability legal entity whose purpose is to produce a product or deliver a service to the marketplace for profit. A company is considered to be the next step in the evolution of the sole proprietorship.
Wall Street analysts are warming up to Johnson Controls, Inc. (JCI), and it’s understandable why. I’ve been bullish on this stock for some time now. The company has strong earnings visibility going into next year, and management recently bumped its quarterly dividend payment significantly higher.
Even though the stock is up about 50% over the last 12 months to a new record high, the company’s 16% dividend increase and new $3.65-billion share buyback program is exactly what institutional investors want. Earnings expectations for Johnson Controls are increasing across the board. (See “If You Don’t Want to Leave This Market, Stick with These Proven Winners.”)
One of the most prolific trends in the stock market over the last few years has been the strong performance of dividend-paying blue chips. Many brand-name, old economy companies have been trading like fast-growing technology stocks.
The marketplace has craved the relative safety, earnings stability, and dividends from corporations whose balance sheets were only getting stronger. It’s a trend that I think is far from over, and it’s why I’m a fan of existing winners. Johnson Controls’ two-year stock chart is featured below:
Chart courtesy of www.StockCharts.com
Any Wall Street enthusiasm for this company is based on a solid earnings outlook and the continued strong performance in automobile manufacturing.
Johnson Controls manufactures seats, doors, instrument panels, and all kinds of vehicle electronics. Management is thinking about selling its electronics business that’s related to the automotive market. This business segment is relatively small compared to the company’s manufacturing of seating components.
In its 2009 fiscal year, the company paid dividends of $0.52 per share; … Read More
There are approximately 118 component companies in this index, which makes its performance that much more impressive. Its return has been broad-based and substantial, and it’s likely to have continued momentum until monetary policy changes.
Biotechnology stocks are 100% risk-capital securities. But because there’s so much money in pharmaceuticals, it’s an equity market sector that’s worthy of some effort if you’re a speculator.
There are two unique features to biotechnology stocks that are not necessarily as prevalent in the rest of the equity market: 1) they have a tendency to trade on their own corporate developments, with less correlation to the action in the broader market; and 2) because so many biotechnology stocks are not going concerns, meaning that they are not established businesses but development companies that have little prospect of immediate profitability, extreme price volatility is a certainty.
Over the years, I’ve considered a number of biotechnology stocks in this column. There are several standouts in this market that continue to provide excellent returns to stockholders.
One large-cap company that continues to distinguish itself is Biogen Idec Inc. (BIIB). This company developed a treatment for multiple sclerosis (MS), and while it is nowhere near a cure, the drug is helping treat patients with MS.
We first considered this stock near the end of April at $219.00 a share. The position consolidated for a while, then took off once again. Last month, when we looked at it, the stock was … Read More
You don’t often hear a lot about United Technologies Corporation (UTX) these days; it’s an old economy name that doesn’t seem to garner much attention from the media.
Nevertheless, the company that makes elevators, helicopters, airplane engines, and HVAC (heating, ventilation, and air conditioning) and fire/security systems continues to perform excellently. It’s a component of the Dow Jones Industrial Average, and the stock’s had an exceptional year. (See “The One Market Sector That’s Consistently Outperforming the Rest.”)
Approximately $17.0 billion of the company’s total sales in 2012 came from its “UTC Climate, Controls and Security” business. Next was “Pratt & Whitney” aircraft engines at $14.0 billion. “Otis” elevators and escalators brought in $12.0 billion in sales last year, followed by “UTC Aerospace Systems” at $8.3 billion and “Sikorsky” helicopters at $6.8 billion.
As a conglomerate with a strong constituent in aerospace, United Technologies has an excellent track record of increasing its dividends to stockholders.
In 2012, the company increased its common share dividend by a total of 11.5%, representing its 76th consecutive year of paying dividends. According to the company, from fiscal year-end 2002 to year-end 2012, United Technologies delivered a 225% total return to shareholders, which is more than double the total return of the DOW or S&P 500.
In 2008, the company paid out $1.35 in total dividends per share. By the end of last year, that figure was $2.03 per share.
Of the company’s total sales, 40% are in the U.S. market, followed by 26% in Europe and 20% in the Asia Pacific region.
Since the recession, United Technologies’ sales, earnings, and earnings per share … Read More
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