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High-quality Johnson Controls (NYSE:JCI) now trades for an extraordinarily cheap valuation. Its P/E is near multi-year lows, and JCI's 2.65% current yield is the second highest of the past dozen years.

European woes and China's economic deceleration aren't helping JCI's automotive businesses. Even so, 2012 earnings are expected to come in at a record $2.52 for the FY ending this month. Analysts predict $2.93 for the year ahead, although, the accuracy of that forecast will depend on how macroeconomic trends play out.

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You could stop reading right now if you're thinking 'double-dip' recession. JCI watched its EPS plunge from $2.33 to $0.47 from 2008 to 2009. The stock price tumbled from $36.50 to $8.40 during that stretch. That extremely large sell off turned out to be the best entry point in JCI in more than fifteen years. It was also the only chance to snag a better yield than today's.

Earnings per share and the shares bounced back quickly in FY 2010 to $2.00 and $40.19, respectively. Ever since, there's been solid support right around $25. Selling has kicked in between $35 and $40 on numerous occasions.

Morningstar loves Johnson Controls. They see fair value as $42.

Standard & Poor's loves Johnson Controls on virtually every metric. They carry a one-year goal price of $38.

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S&P shows an interesting chart that you don't see elsewhere. It's the historical high and low P/E range during each of the past ten years. Note how infrequently JCI has offered a better entry point. Johnson Controls has a 10-year median multiple of 14x and touched 15x or above at some point during each calendar year of the past decade.

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Fourteen times the $2.53 estimate for the year wrapping up would bring JCI back to above $35. That same normalized P/E could justify $41 if the world economy simply muddles along.

Long-term players have been well rewarded despite 2008's meltdown and the Great Recession. Here are JCI's 10-year, split-adjusted numbers, excluding non-recurring items.

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The share price on Aug. 31, 2002 was $11.96. 10-years later, it's $27.21. That's good for 127.5% plus dividends even with JCI at a relative low point. Patient investors should do well with JCI regardless of near-term events. Waiting for economic Armageddon to buy into JCI could pay off even better if you're willing to bet on the sequence playing out as you expect.

JCI is a buy.

The timing? That's your call.

Source: Johnson Controls: Buy Now Or Later?