Critical Survey: United Technologies Corporation (UTX) and B/E Aerospace (BEAV)

United Technologies Corporation (NYSE: UTX) and B/E Aerospace (NASDAQ:BEAV) are both multi-sector conglomerates companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Earnings and Valuation

This table compares United Technologies Corporation and B/E Aerospace’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
United Technologies Corporation $58.11 billion 1.55 $10.15 billion $6.56 17.24
B/E Aerospace N/A N/A N/A $3.08 20.93

United Technologies Corporation has higher revenue and earnings than B/E Aerospace. United Technologies Corporation is trading at a lower price-to-earnings ratio than B/E Aerospace, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

78.9% of United Technologies Corporation shares are held by institutional investors. Comparatively, 92.0% of B/E Aerospace shares are held by institutional investors. 0.2% of United Technologies Corporation shares are held by company insiders. Comparatively, 0.5% of B/E Aerospace shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for United Technologies Corporation and B/E Aerospace, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Technologies Corporation 0 13 4 0 2.24
B/E Aerospace 0 9 2 0 2.18

United Technologies Corporation presently has a consensus price target of $124.13, suggesting a potential upside of 9.77%. B/E Aerospace has a consensus price target of $59.57, suggesting a potential downside of 7.60%. Given United Technologies Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe United Technologies Corporation is more favorable than B/E Aerospace.

Risk and Volatility

United Technologies Corporation has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, B/E Aerospace has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Dividends

United Technologies Corporation pays an annual dividend of $2.80 per share and has a dividend yield of 2.5%. B/E Aerospace pays an annual dividend of $0.84 per share and has a dividend yield of 1.3%. United Technologies Corporation pays out 42.7% of its earnings in the form of a dividend. B/E Aerospace pays out 27.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. B/E Aerospace has increased its dividend for 5 consecutive years.

Profitability

This table compares United Technologies Corporation and B/E Aerospace’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Technologies Corporation 9.15% 18.07% 5.91%
B/E Aerospace 8.27% 118.81% 7.21%

Summary

United Technologies Corporation beats B/E Aerospace on 8 of the 14 factors compared between the two stocks.

About United Technologies Corporation

United Technologies Corporation is engaged in providing high technology products and services to the building systems and aerospace industries around the world. The Company operates through four segments: Otis; UTC Climate, Controls & Security; Pratt & Whitney, and UTC Aerospace Systems. Otis operates as an elevator and escalator manufacturing, installation and service company. UTC Climate, Controls & Security segment is engaged in providing heating, ventilating, air conditioning (HVAC) and refrigeration solutions. The Pratt & Whitney segment supplies aircraft engines for the commercial, military, business jet and general aviation markets. Pratt & Whitney segment provides fleet management services and aftermarket maintenance, repair and overhaul services. The UTC Aerospace Systems segment provides aerospace products and aftermarket service solutions for aircraft manufacturers, airlines, regional, business and general aviation markets, military, space and undersea operations.

About B/E Aerospace

B/E Aerospace, Inc. is a manufacturer of cabin interior products for commercial aircraft and business jets. The Company sells its products and provides services directly to airlines and aerospace manufacturer. It operates through two segments. The Company manufactures aircraft seats, offering a selection of first class, business class, tourist class and regional aircraft seats. It manufactures and sells seats, which include the seat frame, cushions, armrests, tray table and a range of optional features, such as adjustable lumbar supports, electrical actuation systems, footrests, reading lights, head/neck supports and other comfort amenities. The business jet segment’s products include a range of business jet seating and sofa products, including electric fully berthing lie-flat seats, air valves and oxygen delivery systems as well as sidewalls, bulkheads, credenzas, closets, galley structures, lavatories, wastewater systems, de-icing systems, cabin management systems and tables.

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