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OTIS - Low Equipment Sales Justify The Modest Valuation Of Otis
Otis Worldwide Corporation
Recently, Otis (OTIS) has spun-off from United Technologies (RTX). I wrote about Otis shortly before the spin-off but think the time is right to dig a little bit deeper into several topics.
Sometimes, spin-offs can be great bargains, but in this case, it looks like Otis is a mediocre play. The core of my thesis is that equipment growth is key and new elevator sales are more relevant than services sales. Services have a higher EBIT margin, and this can be misleading, as it makes Otis look cheap. Other elevator companies