How United Technologies Corporation (UTX) Can Assist Your Portfolio

The only major challenge at this time for UTX might be the helicopter unit Sikorsky. Although orders are at record levels, partially thanks to Denmark’s purchase of MH 60-R maritime models, investments in development of the Chinese military helicopter will crimp results. Sikorsky’s profits are pegged to fall $100 million to $150 million year over year.

Why Invest?

Rather than making another large acquisition, UTX has said that it will utilize cash for long-term debt paydown and share repurchases. It will also continue to prioritize margin expansion. All of this leads to rising share net and a cleaner balance sheet, the basis for my recommendation of UTX as part of a long-term growth portfolio. It also pays out a 2.4% dividend yield that may allure income investors alike (see my earlier blog about income holdings).

Similarly, some will want to consider the purchase of a third industrial and aerospace company, namely Textron Inc. (NYSE:TXT). It shares facets of both GE and UTX, including a stabilizing finance unit (like GE) as well as a burgeoning aerospace operation, particularly if its business jet unit, Cessna, can return to form. For more on TXT, see my January 23, 2013 blog.

The article How United Technologies Can Assist Your Portfolio originally appeared on Fool.com and is written by Damon Churchwell.

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