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I’ve been looking at OTIS as a potential stock to start a position. Not flashy, and certainly will not be the next NVDA, but is a very durable wide moat business. Is a company really going to slash elevator maintenance from their annual budget. Anyone a current shareholder?
I like to use StockRover. They're calling it a HOLD, currently. Their call is for 8.65% upside to target share price. (1 year.) P/E is 24.2 and that's already too rich for my blood. A solid company that's been around forever, you're right. I like the beta, at just 0.47. Maybe wait for the expected fall in the Market generally? The EPS Predictability and Cash Flow Predictability numbers are stellar. Over the past 5 years, the company's own P/E is at a rather reduced point, though 24.2 is still higher than I'd be willing to pay. The dividend yield is 1.8% and so it's just too little for me to go for. But if dividends are not a priority for you, that just won't matter; it will feel like a bonus when it comes. Payout ratio is 41.7, so that's sustainable. ...You can always dollar-cost-average your way in, in small steps, on a regular basis. Break a leg!
I like to use StockRover. They're calling it a HOLD, currently. Their call is for 8.65% upside to target share price. (1 year.) P/E is 24.2 and that's already too rich for my blood. A solid company that's been around forever, you're right. I like the beta, at just 0.47. Maybe wait for the expected fall in the Market generally? The EPS Predictability and Cash Flow Predictability numbers are stellar. Over the past 5 years, the company's own P/E is at a rather reduced point, though 24.2 is still higher than I'd be willing to pay. The dividend yield is 1.8% and so it's just too little for me to go for. But if dividends are not a priority for you, that just won't matter; it will feel like a bonus when it comes. Payout ratio is 41.7, so that's sustainable. ...You can always dollar-cost-average your way in, in small steps, on a regular basis. Break a leg!
Never heard of that stock analysis website. I typically use Value Line and Morningstar. Recently, I’ve been looking at OTIS, AOS, MKL, CB, and AWK. The last one currently looks the least interesting.
I owned OTIS when it spun off of UTX, along with CARR and RTX. I did sell at some point. I have always considered it a good company, as you say "not flashy" and wide moat.
I tend to compare any stock to the S&P. If it cannot beat the S&P long term, I ask why would I own it. In this case, it may be a defensive position?
Not sure how many know that M* does a lot of stock analysis. I’m a subscriber. Little experience however using their metrics. FWIW they are favorably disposed toward OTIS and have a fair value of $106, substantially above its recent close.
Baron’s has highlighted the company in at least one piece over the past year and is also favorably inclined. Their August 14, 2025 article is headlined: ”Otis Worldwide Stock Is Set to Get a Lift - The elevator company is poised to benefit from increased demand, thanks to a building boom in China, South Korea and India”
I have had pretty good success with Baron’s recommendations, but much patience needed. Sometimes takes years for their assessment to play out. Easy to get frustrated.
I usually look at Zack’s. They have OTIS rated a 3 (hold). They rate it C for momentum but D for both growth and value. Compared to the industry they have it in the upper 20%. I’m often puzzled by their ratings. I think they tend to be near-term thinkers.
I owned OTIS when it spun off of UTX, along with CARR and RTX. I did sell at some point. I have always considered it a good company, as you say "not flashy" and wide moat.
I tend to compare any stock to the S&P. If it cannot beat the S&P long term, I ask why would I own it. In this case, it may be a defensive position?
The question you ask yourself is a good one, and one we should all ask ourselves. And, yes, I think OTIS is a bit more defensive as compared to the S&P overall, and also more attractively priced. Still under (strong) consideration.
Currently, I only hold two individual stocks in addition to VOO. Both BRK.A&B and MSFT have been long time buy and hold stocks for us. Sold CAT and GOOG recently, but both were trades rather than long term conviction positions.
Not sure how many know that M* does a lot of stock analysis. I’m a subscriber. Little experience however using their metrics. FWIW they are favorably disposed toward OTIS and have a fair value of $106, substantially above its recent close.
Baron’s has highlighted the company in at least one piece over the past year and is also favorably inclined. Their August 14, 2025 article is headlined: ”Otis Worldwide Stock Is Set to Get a Lift - The elevator company is poised to benefit from increased demand, thanks to a building boom in China, South Korea and India”
I have had pretty good success with Baron’s recommendations, but much patience needed. Sometimes takes years for their assessment to play out. Easy to get frustrated.
I usually look at Zack’s. They have OTIS rated a 3 (hold). They rate it C for momentum but D for both growth and value. Compared to the industry they have it in the upper 20%. I’m often puzzled by their ratings. I think they tend to be near-term thinkers.
Appreciate your response. Totally agree with what you stated. Given our current Orange President, I’m not sure how our companies are going to do business in China. He is really forcing countries to become more detached from the U.S., which will spur the growth of Chinese businesses to replace ours in China. That is a growth concern for U.S. multinationals.
For what it's worth, I've heard Josh Brown mention OTIS several times on CNBC's Halftime show. Per Brown, the secret sauce for OTIS is their continued service revenue for installed products.
their continued service revenue for installed products
Well, for some of their installed products. They have a Korean subsidiary that manufactured our building's elevator. A few years ago our property manager was looking for a company to service our elevator and had a very hard time finding anyone who could do it. And I'm told that getting spare parts can take days or weeks.
OTOH, perhaps Otis can sell into China from this subsidiary.
In some sectors (don't know about machinery) manufacturing companies get higher valuations than service companies. So it might be worth checking out hardware:service ratios at similar companies (e.g. Schindler, Kone) to see how they're valued.
Greatly appreciate everyone’s comments. Still doing due diligence on the stock. I’m not looking for HRs, but rather consistent low risk singles hitters.
I would invest in OTIS just for their escalator's innate ability to detect integrity (or lack thereof) at their UN installation.
*chuckle*
Other names to consider in the elevator-service sector include Schindler and ThyssenKrupp. Like Otis, they have similar business models. (I don't own any, but am familiar w/them since I oversaw my condo building's elevator replacement project a few years ago)
Comments
I tend to compare any stock to the S&P. If it cannot beat the S&P long term, I ask why would I own it. In this case, it may be a defensive position?
Baron’s has highlighted the company in at least one piece over the past year and is also favorably inclined. Their August 14, 2025 article is headlined: ”Otis Worldwide Stock Is Set to Get a Lift - The elevator company is poised to benefit from increased demand, thanks to a building boom in China, South Korea and India”
I have had pretty good success with Baron’s recommendations, but much patience needed. Sometimes takes years for their assessment to play out. Easy to get frustrated.
I usually look at Zack’s. They have OTIS rated a 3 (hold). They rate it C for momentum but D for both growth and value. Compared to the industry they have it in the upper 20%. I’m often puzzled by their ratings. I think they tend to be near-term thinkers.
Currently, I only hold two individual stocks in addition to VOO. Both BRK.A&B and MSFT have been long time buy and hold stocks for us. Sold CAT and GOOG recently, but both were trades rather than long term conviction positions.
Well, for some of their installed products. They have a Korean subsidiary that manufactured our building's elevator. A few years ago our property manager was looking for a company to service our elevator and had a very hard time finding anyone who could do it. And I'm told that getting spare parts can take days or weeks.
OTOH, perhaps Otis can sell into China from this subsidiary.
In some sectors (don't know about machinery) manufacturing companies get higher valuations than service companies. So it might be worth checking out hardware:service ratios at similar companies (e.g. Schindler, Kone) to see how they're valued.
Other names to consider in the elevator-service sector include Schindler and ThyssenKrupp. Like Otis, they have similar business models. (I don't own any, but am familiar w/them since I oversaw my condo building's elevator replacement project a few years ago)