General Electric Company (GE): This World Leader Is Not About to Relinquish Its Dominance

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While Siemens makes efforts to bring its cost structure in line with General Electric, United Technologies Corporation (NYSE:UTX) aims to expand its geographic presence to rival that of General Electric Company (NYSE:GE). Unlike General Electric and Siemens AG (NYSE:SI), United Technologies has yet to develop a significant presence in emerging markets. The company’s expansion into these markets will undoubtedly lead to higher growth at the firm — and will put more pressure on General Electric’s bottom line.

However, United Technologies Corporation (NYSE:UTX)’ competitive advantage comes from its entrenchment in its current markets. Although investments in emerging markets may help it grow its top line, the company’s prospects in these markets are less bright than in the slow-growth markets it currently dominates.

Investment case

Siemens AG (NYSE:SI) and United Technologies Corporation (NYSE:UTX) pose threats in specific markets, but no other company can take on General Electric Company (NYSE:GE) in a global onslaught. The company’s wide moat, combined with its virtually limitless access to capital, make it unlikely that its earning power will dip over the next decade.

In addition, the company plans to significantly reduce its share count in 2013 — one of the few large companies that will be buying back shares this year at a discount to intrinsic value.

As a result, the company’s 17 earnings multiple on a depressed earnings figure in a bull market makes it a good bargain for long-term investors to add to their portfolio.

Ted Cooper has no position in any stocks mentioned. The Motley Fool owns shares of General Electric Company (NYSE:GE).

The article This World Leader Is Not About to Relinquish Its Dominance originally appeared on

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