Otis Worldwide: Shareholder Value Is Eventually Going To The Top Floor

Blake Downer
1.95K Followers

Summary

  • Otis Worldwide has an impressive 13.8% average quarterly return on capital.
  • Net margins have been slowly rising, and have reached 9.89% in the most recent quarter.
  • The company has a forward P/E of 25.59x, a forward PEG of 2.59x, and a forward Price/Cash Flow of 26.43x.
  • Their buyback program and dividend growth should lead to a significant valuation increase for long-term holders.
  • Otis Worldwide stock is a Buy.

Otis United Technologies service van of Otis Elevator company

Michael Vi

Thesis

Finding companies with healthy financials and deep moats can be difficult. With its excellent margins and culture of improving shareholder value, Otis Worldwide Corporation (NYSE:OTIS) stands out as a potential long-term hold. While I do believe

This article was written by

1.95K Followers
I am an Electromechanical Engineer. I have been paying attention to markets since the late 1990's. I began taking classes on economics when I was 15, and was a business and economics major my freshman year. If I hadn't fallen in love with the Engineering classes I was taking as electives, I would probably have followed up on my dream of running my own small business. I am a value investor and have studied the greats (Benjamin Graham, Warren Buffett, Charlie Munger, Peter Lynch, etc.), but my personal investing style is most closely aligned with Mohnish Pabrai. Because I have been obsessed with strategy games and Game Theory since childhood, I tend to evaluate companies based on the quality and number of edges they have collected vs their peers, and how well I expect their strategy to perform in the everchanging meta. I am drawn to innovation, typically have a long timeframe outlook, and am always hunting for potential multibaggers.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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