Why This Dow Stock Is Underrated


In today's edition, industrials editor and analyst Brendan Byrnes discusses whether United Technologies is an overrated or underrated Dow stock. So far this year, United Tech has risen nearly 10%, beating the Dow by a few percentage points. The According to S&P Capital IQ, the average analyst recommendation for United Tech is 1.6 (1 = strong buy, 5 = strong sell), and the stock sports a four-star rating from our CAPS community. Analysts are clearly bullish on the stock, and Brendan agrees. Its $16.5 billion Goodrich acquisition should help the company benefit from the aerospace boom, and the company has been performing fairly well in most of its other segments. Importantly, with the company trading around 16 times earnings, the future earnings power of Goodrich doesn't seem properly priced into the stock. Check out the following video for more on United Technologies.

United Technologies looks like a long-term winner, but it couldn't quite crack into our list of top Dow stocks. We've outlined and analyzed our top three picks in our new free report: "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so just click here and get your copy today.

The article Why This Dow Stock Is Underrated originally appeared on Fool.com.

Austin Smith has no positions in the stocks mentioned above. Brendan Byrnes owns shares of United Technologies. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend 3M. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.