Keeping Cool With HVAC Dividend Stocks

Next, is another long time holding of mine, Johnson Controls International plc (NYSE:JCI). Founded in 1885, JCI recently completed a merger with Tyco International plc (TYC), combining the two industrial companies while jettisoning one of its core segments (automotive interiors) as a spinoff (Adient plc (NYSE:ADNT)), which is set to occur on October 31. With a current yield of 1.95% and a moderate payout ratio of 65.1%, Johnson Controls International plc (NYSE:JCI) can continue its dividend distribution based on current cash flows, and with a five-year annualized dividend growth rate of 14.46% should continue to pay ever-increasing passive income to shareholders for years to come. For those looking to invest in alternative fuels, particularly the lithium and lead acid battery markets, Johnson Controls International plc (NYSE:JCI) may be a diversified fit for your portfolio. JCI currently trades at a PE of 34.9.

Finally, a name that really needs no introduction as it’s already quite popular among many fellow dividend bloggers, United Technologies Corporation (NYSE:UTX). Founded in 1934, this diversified industrial company operates many segments, including UTC Climate which offers HVAC solutions for residential, commercial, industrial, and transportation applications. With a decent current yield of 2.65% and a moderate payout ratio of 40.1%, United Technologies Corporation (NYSE:UTX) has the cushion required to keep paying out a dividend as well as continuing to raise it. As with all the other names mentioned, UTX also sports an impressive ten-year dividend growth of 11.27%. With a current PE of 22.1, United Technologies Corporation (NYSE:UTX) is trading above its five-year average PE of 16.3. Forward PE looks more enticing at 14.5. Of course, a four star rating from Morningstar doesn’t hurt either.

There you have it. A brief overview of the current major players in the HVAC market. Clearly, these companies have a lot in common. They are all very old and well-established businesses operating in a non-glamorous sector that we all rely upon. They each offer low-to-moderate current yields but all have impressive annualized dividend growth rates for many years that all appear to be sustainable based on current cash flow. While their businesses are very cyclical in nature they are consistent and offer potential buyers good opportunities to jump in and buy when the business cycles enter an economic trough.

What do you think about the HVAC market and some of the major companies that operate in the space? Are any of the above names in your portfolio? Please let me know below.

Disclosure: Long IR, ALLE, JCI

Note: This article is written by DivHut. Check out more of the site’s dividend investing content at divhut.com.