Monthly Archives: June 2020

Raytheon Technologies

Ticker: RTX, Buy below $65.

Raytheon Technologies Corporation is a major aerospace and defense company.

Why I Would Buy

  1. Moat – Part of an oligopoly of Aerospace players, especially engines.   
  2. Credit Rating – Investment grade credit rating.
  3. Uncorrelated Businesses: Aerospace is a high beta industry, but the defense industry moves to an uncorrelated cycle – potentially smoothing out earnings
  4. Dividend – generous 3%+ yield

What Could Go Wrong

  1. Synergy May Not Materialize – Recently created from merger of Raytheon and United Technologies.  Not enough operating history available to analyze the combined entity
  2. Coronavirus Impact – The extent of damage to aerospace industry is unkown.

Disclosure: I am long RTX, please read additional disclosures here before taking any action based on this post.