Diversified business conglomerate United Technologies Corp. (UTX) recently declared a 10% year-over-year hike in its quarterly dividend payout to 58.9 cents per share for the fourth quarter. Thus, the dividend on annualized basis now stands at $2.36 per share. The fourth quarter 2013 dividend is payable on Dec 10 to shareholders of record as of Nov 15.
Based on the closing price of $102.84 as of Oct 9, the proposed dividend affirms a yield of 2.3%. A steady dividend payout facilitates the long-term strategy of United Technologies to provide attractive risk-adjusted returns to its stockholders. In addition, decent dividend increases at periodic intervals have been one of the company’s most attractive features.
The company had earlier hiked its dividend in third quarter 2012, when it raised the quarterly dividend payout from 48 cents to 53.5 cents per share or from $1.92 to $2.14 on an annualized basis. Prior to that, United Technologies raised its quarterly dividend in second quarter 2011 from 42.5 cents to 48 cents per share, which equated to an annualized increase from $1.70 to $1.92.
The company also has a share repurchase program in place, under which it repurchased shares worth $670 million as of Jun 30, 2013. Over the years, United Technologies has consistently returned significant cash to its shareholders through dividends and share repurchases.
Based in Hartford, CT, United Technologies provides high-end technology products and services to the building systems and aerospace industries worldwide. The company is a diversified business conglomerate, serving various end markets such as aerospace, defense and commercial construction. The business diversification allows the company to remain profitable amid tough economic times.
The operations of the company are primarily classified into two principal businesses: commercial and aerospace. Under its commercial business, the company has Otis and the UTC Climate, Controls & Security division, which combined the former Carrier and UTC Fire & Security divisions. The aerospace business of the company consists of Sikorsky aircraft and the UTC Propulsion & Aerospace Systems, which includes UTC Aerospace Systems and Pratt & Whitney divisions.
United Technologies presently has a Zacks Rank #3 (Hold). Other players in the industry worth mentioning include LSB Industries Inc. (LXU), ITT Corporation (ITT) and Marubeni Corporation (MARUY), each carrying a Zacks Rank #2 (Buy).