Bleak Short-Term Outlook Overshadows Long-Term Value: Johnson Controls, Inc. (JCI), Honeywell International Inc. (HON), United Technologies Corporation (UTX)

However, Honeywell International Inc. (NYSE:HON) has traditionally not distributed excess capital to shareholders, instead deciding to hold onto it for acquisitions and capital expenditures. Also, like Johnson Controls, Honeywell International Inc. (NYSE:HON) is overly reliant on one industry.

United Technologies Corporation (NYSE:UTX), on the other hand, is the most diversified of the three companies and is also in a good position to succeed going forward. The company has a number of growth opportunities overseas, although its potential growth is lower than that of Johnson Controls, Inc. (NYSE:JCI).

In addition, United Technologies Corporation (NYSE:UTX)’s revenues have yet to fully recover from the recession — a situation which should improve alongside the global economy. Finally, the company is making a large bet on its aerospace segment in a bid to gain market share and increase overall profitability.

The Long View

While Honeywell International Inc. (NYSE:HON) and United Technologies Corporation (NYSE:UTX) duke it out in the aerospace business, Johnson Controls, Inc. (NYSE:JCI) has the battery and HVAC systems to itself. This should allow the company to prosper over the long run, regardless of whatever short-term hurdles may arise.

The company trades at 14 times 2011 earnings per share and 8.4 times 2011 EBITDA per share. These multiples do not fully account for the company’s strong balance sheet and intention to sell the automotive interiors business. Once the segment is sold, expect a quick revaluation of the company’s shares as the market realizes Johnson’s strong value proposition.

The article Bleak Short-Term Outlook Overshadows Long-Term Value originally appeared on Fool.com and is written by Ted Cooper.

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