Industrial Technology Company Boosts Dividends 20 Consecutive Years, Pays 2.4% Yield
By: Ned Piplovic,
A company that provides industrial technology products and services currently offers investors a 2.4% dividend yield and has boosted its annual dividends every year for the past two decades.
In addition to the 20-year rising dividend streak, the company’s annual dividend payout average growth rate is well into double-digit percentages. To complement the dividends income, the share price appreciated almost 20% in the last 12 months to produce a 23% one-year total return.
The next ex-dividend date will occur on November 16, 2017, and the pay date is scheduled for December 10, 2017.
United Technologies Company (NYSE:UTX)
Founded in 1934 and headquartered in Farmington, Connecticut, the United Technologies Corporation provides technology products and services to commercial aerospace, defense and building industries worldwide. The company operates through four independent business units – UTC Climate, Controls & Security, Pratt & Whitney Otis and UTC Aerospace Systems.
The UTC Climate, Controls & Security segment provides heating, ventilating, air conditioning and refrigeration solutions for residential, commercial, industrial and transportation applications. This segment offers electronic security products, including intruder alarms, access control systems and video surveillance systems. Additionally, the segment provides fire safety systems and products, as well as design, installation, repair, maintenance, monitoring and inspection of such systems. UTX’s Pratt & Whitney segment supplies aircraft engines for commercial, military, business jet and general aviation markets. It also provides aftermarket maintenance, repair, overhaul and fleet management services. The Otis segment designs, manufactures, sells and installs passenger and freight elevators, escalators and moving walkways. In addition to providing new systems, this segment offers modernization products to upgrade elevators and escalators, as well as maintenance and repair services. Lastly, the company’s UTC Aerospace Systems segment provides electric power generation and various control and monitoring systems for the aerospace and space exploration industries. The segment offers power management, air data and aircraft sensing, engine control, intelligence, surveillance and reconnaissance systems and other systems.
The current quarterly dividend distribution of $0.70 is 6.1% above the $0.66 payout from the same period last year. This current dividend is equivalent to a $2.80 annualized payout and a 2.4% dividend yield.
The company’s current yield greatly exceeds the average yield of its peers and competitors. Compared to the 1.15% average yield of the Industrial Goods sector, UTX’s 2.4% current yield is 104% higher. The variance is even higher – 173% – when compared to the 0.86% average yield of all the companies in the Aerospace & Defense segment.
United Technologies has been paying dividends since 1936 and has hiked its annual dividend for the past 20 consecutive years. Over the two last decades, the company enhanced its annual dividend amount at an average rate of 11.6% per year. The result of compounding dividend hikes for 20 consecutive years at that rate is nine-fold growth of the annual dividend payout. The company’s 41% dividend payout ratio indicates that it should be able to continue raising its annual dividends for the near future without any negative effect on the company’s financial results.
Just two days into the current trailing 12-month period, the company’s share price hit its 52-week low on October 21, 2016, when it closed at $98.67. Since the October 2016 bottom, the share price rose 25.4% and reached its 52-week high of $123.71 on July 21, 2017, which was only $0.40, or 0.3%, below the $124.11 all-time high that the share price reached on February 16, 2015.
After peaking in July 2017, the share price dropped 11.4% and closed at $109.55 on September 8, 2017. However, after the most recent direction reversal, the share price regained 68% of its losses from peak price and closed on October 18, 2017, at 119.14. This price is just 3.7% short of the 52-week high and 20.7% higher than its 52-week low from October 21, 2016.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.