Large Cap Capital Goods Companies Can’t Escape the Gloom

The largest companies in the Capital Goods sector are not immune from concerns about the broader economy, despite the advantages that their size should confer in the face of a slowing economy.  Large companies generally weather economic downturns better than their smaller competitors, because large companies generally have more cash, more financing options, and can borrow funds at advantageous rates.  Following is some information on recent developments at these companies and their share price performance:

  • United Technologies Corporation (NYSE:UTX): United Technologies announced on September 21st that it is buying Goodrich (NYSE:GR) at a 47% premium to Goodrich’s Sept. 15th closing price.  Investors are concerned about the amount of debt that UTX will take on in order to finance the deal.  Reports are that the deal will raise total debt from $11.4 billion o $25.7 billion.  This increases its debt-to-total capital ratio from 32% to 92%.  Shares recently traded at $71.97, down $0.45, or 0.62%, on the day.  The shares have traded in a 52-week range of $67.12 to $91.83 and its market capitalization is $65.33 billion.  About the company: United Technologies Corporation provides technology products and support services to customers in the aerospace and building industries worldwide. The Company’s products include aircraft engines, elevators and escalators, heating and air conditioning equipment, helicopters, aerospace systems, fuel cell systems, and fire and safety equipment.
  • 3M Company (NYSE:MMM): Despite news that 3M Company recently signed a deal with a lithium-ion batter manufacturer to license its technologies, the shares are trading down today. The shares recently traded at $73.56, down $0.97, or 1.29%, on the day.  The shares have traded in a 52-week range of $72 to $98.19 and its market capitalization is $52.24 billion.  About the company: 3M Co. conducts operations in electronics, telecommunications, industrial, consumer and office, health care, safety, and other markets. The Company’s businesses share technologies, manufacturing operations, brands, marketing channels, and other resources. 3M serves customers in countries located around the world.
  • Caterpillar, Inc. (NYSE:CAT): Despite having recently signed a deal with Navistar International Corporation (NYSE:NAV) to create freight trucks for markets outside of North America, the shares are trading down today.  The shares recently traded at $75.17, down $0.22, or 0.29%, on the day.  The shares have traded in a 52-week range of $72.60 to $116.55 and its market capitalization is $48.56 billion. About the company: Caterpillar Inc. designs, manufactures, and markets construction, mining, agricultural, and forestry machinery. The Company also manufactures engines and other related parts for its equipment, and offers financing and insurance. Caterpillar distributes its products through a worldwide organization of dealers.
  • The Boeing Company (NYSE:BA): In spite of recent reports regarding an increase in demand for capital goods, Boeing’s shares are down today, in concert with the rest of the sector and overall market. The shares recently traded at $61.54, down $0.83, or 1.33%, on the day.  The shares have traded in a 52-week range of $56.01 to $80.65 and its market capitalization is $45.58 billion. About the company:  The Boeing Company, together with its subsidiaries, develops, produces, and markets commercial jet aircraft, as well as provides related support services to the commercial airline industry worldwide. The Company also researches, develops, produces, modifies, and supports information, space, and defense systems, including military aircraft, helicopters and space and missile systems.
  • Honeywell International, Inc. (NYSE:HON): Despite bullish sentiment from Nomura Securities (NYSE:NMR), which rates the stock a Buy, the company’s shares are also trading down today. The shares recently traded at $44.87, down $0.15, or 0.33%, on the day.  The shares have traded in a 52-week range of $41.50 to $62.28, and its market capitalization is $35.11 billion.  About the company: Honeywell International Inc. is a diversified technology and manufacturing company with operations around the world. The Company provides aerospace products and services, control technologies, automotive products, and power generation systems. Honeywell also provides specialty chemicals, fibers, plastics, and electronic and advanced materials.

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