Ticker: RTX, Buy below $65.
Raytheon Technologies Corporation is a major aerospace and defense company.
Why I Would Buy
- Moat – Part of an oligopoly of Aerospace players, especially engines.
- Credit Rating – Investment grade credit rating.
- Uncorrelated Businesses: Aerospace is a high beta industry, but the defense industry moves to an uncorrelated cycle – potentially smoothing out earnings
- Dividend – generous 3%+ yield
What Could Go Wrong
- Synergy May Not Materialize – Recently created from merger of Raytheon and United Technologies. Not enough operating history available to analyze the combined entity
- 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.