RTX Corporation (RTX) Stock Analysis

RTX Corporation Dividend

RTX Corp. is a diversified aerospace and defense industrial company formed in 2020 from the merger of United Technologies and Raytheon, with roughly equal exposure as a supplier to commercial aerospace manufactures and to the defense market. United Technologies had increased its dividend 26 consecutive years but its three new companies Carrier Global (CARR), Otis Worldwide (OTIS), and Raytheon Technologies (RTX) have not been extended the old company’s Aristocrat status.

The new company has increased its dividend for 3 consecutive years. 

The company operates in three segments: Collins Aerospace, a diversified aerospace supplier; Pratt & Whitney, an aircraft engine manufacturer; and Raytheon, a defense prime contractor providing a mix of missiles, missile defense systems, sensors, hardware, and communications technology to the military. 

Current Dividend Per Share Annualized: $2.36

RTX Corporation (RTX) Intrinsic Value – Margin of Safety Analysis            

(updated September 2023)

Normalized Diluted Earnings Per Share (TTM): $3.77
Free Cash Flow Per Share (TTM): $1.52
Cash Flow From Operations Per Share (TTM): $3.57

Estimated Intrinsic Value: $69

Target Buy Price Based on Required Margin of Safety =  $53
(Required Margin of Safety Based On Risk Stability Grade:

A = 10%, B = 20%, C = 30%, D = 40%, F = 50%)

Target SELL Price Based on Estimated Intrinsic Value = $76
(Allow Overvaluation Adjusted by Risk Stability Grade:

A = 20%, B = 15%, C = 10%, D = 5%, F = 0%)

Risk / Stability Grade: C

A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. These stocks require the slimmest margin of safety within the stock universe.

B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. The margin of safety required should be greater than stocks with an A grade but less than the average stock.

C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The margin of safety required is greater than A & B stocks, but less than D & F stocks.

D grade indicates a company in good standing but has issues that could affect its stability and long term risks. D rated stocks should require a large margin of safety when purchased.

F grade indicates a company with significant issues that are currently affecting its stability and long term risks. Require an extremely large margin of safety for F rated stocks when purchased.

Financial Risk Grade: C

A grade indicates an extremely low probability of a dividend cut. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories.

B grade indicates a low probability for a dividend cut.

C grade indicates a low probability for a dividend cut with only small safety risk issues.

D grade indicates there are issues that should be considered concerning future dividend payments.

F grade indicates serious dividend safety risks. Investors should complete comprehensive due diligence before investing.

Business Quality Grade:  D+

A grade indicates earnings quality is high or far above average.

B grade indicates earnings quality is good and/or above average.

C grade indicates earnings quality is acceptable or average.

D grade indicates earnings quality is poor and requires thoughtful due diligence.

F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence.

Earnings Report:  6/30/23

AAAMP Portfolios Position Disclosures:
Dividend Growth & Income (DGI) – None
Treasure Trove Dividend (TTD) – None
Global Dividend Value (GDV) – None
Global Value (GV) – None
Global Value Aggressive (GVA) – None
Global High Yield (GHY) – None

Company Description

Sector: Industrials
Industry: Aerospace & Defense

RTX is a diversified aerospace and defense industrial company formed from the merger of United Technologies and Raytheon, with roughly equal exposure as a supplier to commercial aerospace manufacturers and to the defense market.

The company operates in three segments: Collins Aerospace, a diversified aerospace supplier; Pratt & Whitney, an aircraft engine manufacturer; and Raytheon, a defense prime contractor providing a mix of missiles, missile defense systems, sensors, hardware, and communications technology to the military.Raytheon Technologies Corporation is an aerospace and defense company that provides advanced systems and services for commercial, military and government customers worldwide.

Disclaimer:
While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.