Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

E I Du Pont De Nemours And Co (DD) vs. United Technologies Corporation (UTX): Which Dow Stock’s Dividend Dominates?

Page 1 of 2

Dividend stocks outperform non-dividend-paying stocks over the long run. It happens in good markets and bad, and the benefit of dividends can be quite striking: Dividend payments have made up about 40% of the market’s average annual return from 1936 to the present day. But few of us can invest in every single dividend-paying stock on the market, and even if we could, we might find better gains by being selective. That’s why we’ll be pitting two of the Dow Jones Industrial Average‘s dividend payers against each other today to find out which Dow stock is the true dividend champion. Let’s take a closer look at our two contenders now.

E I Du Pont De Nemours And Co

Tale of the tape
E I Du Pont De Nemours And Co (NYSE:DD) has been part of the Dow for 77 consecutive years, which makes it one of the longest-tenured components on the index. It’s also one of the oldest companies in the United States, with roots that go back to 1802. DuPont is still headquartered in Wilmington, Del., after all these years, and it’s now the second-largest chemical company by revenue (and the largest by net income) in the U.S.
E I Du Pont De Nemours And Co (NYSE:DD) makes a wide range of products that have reached consumer markets over the years, and it’s likely that at least a few things in your house have some origins in a DuPont plant.

United Technologies Corporation (NYSE:UTX) has been part of the Dow for 74 consecutive years. It originated as United Aircraft following the breakup of a 1930s aviation monopoly and has been a government contractor since its earliest days. Today, the Connecticut-based conglomerate is considerably more diversified: It owns the world’s largest elevator-manufacturer and has significant other building-systems operations as well. It’s not the largest defense contractor for the U.S. government (last year it ranked sixth by profit), but United Technologies Corporation (NYSE:UTX) relies less on Uncle Sam than many of its peers.

Statistic DuPont United Technologies
Market cap $48.3 billion $83.6 billion
P/E ratio 10.6 13.5
TTM profit margin 13% 10.2%
TTM free-cash-clow margin* 6.3% 4.8%
Five-year total return 40.7% 49.8%

Source: Morningstar and YCharts. TTM = Trailing-12-month.
*Free-cash-flow margin is free cash flow divided by revenue for the trailing 12 months.

United Technologies Corporation (NYSE:UTX) has size and growth on its side, but DuPont has better margins. It looks like this might be a close battle.

Round one: endurance
E I Du Pont De Nemours And Co (NYSE:DD) has been paying dividends since 1904, according to its investor relations website. That puts United Technologies at an immediate disadvantage, as the company has only existed since the 1930s. No matter how far back we go, United Technologies Corporation (NYSE:UTX) just can’t beat DuPont here.

Round two: stability
Paying dividends is well and good, but how long have our two companies been increasing their dividends? The same dividend payout year after year can quickly fall behind a rising market, and there’s no better sign of a company’s financial stability than a rising payout in a weak market (so long as it’s sustainable, of course). E I Du Pont De Nemours And Co (NYSE:DD) has increased its dividends twice in the last two years, but its payouts did not change from 2007 all the way through 2012. The last time United Technologies Corporation (NYSE:UTX) failed to increase its dividend was in 1994. This one goes to the defense contractor.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!