UTX - Why Raytheon (and United Technologies) Is a Good Value Stock for 2020
It's going to be a busy year for United Technologies (NYSE: UTX) and Raytheon (NYSE: RTN). First, United Technologies will spin off its elevator business, Otis, and, separately, its heating, ventilation, and air conditioning business, Carrier. Second, the remaining aviation business of United Technologies (namely Pratt & Whitney and Collins Aerospace) will be merged with Raytheon in order to create a new company called Raytheon Technologies with a new ticker, RTX. Let's take a look at what the new company could look like and try to piece together whether it makes sense to buy the stock.
A Raytheon missile firing. Image source: Raytheon website.
We already know that the newly created company, Raytheon Technologies, will be 57% owned by United Technologies (UTC) shareholders and 43% by Raytheon. Therefore, the key difference in deciding whether to buy Raytheon or UTC stock comes down to the fact that if you buy Raytheon stock, you will end up owning 43% of Raytheon Technologies.