$CARR - A Good Choice for Any Climate
Welcome to my September Stock Idea! I bounced around a few options, but ended up choosing Carrier Global, $CARR. $CARR is one of my longest held positions and I currently hold it in both my Taxable Brokerage and Roth IRA.
I will hit a few key points about the company, why I invest currently, and what future prospects are for the company that continues to make $CARR a strong investment.
What is Carrier?
Carrier is a "Global leader in healthy, safe, sustainable and intelligent building and cold chain solutions". So what does this mean? Carrier's bread and butter is their HVAC (Heating, ventilation and air conditioning) equipment. Carrier equipment regulates and maintains the climate in your home & workplace through your air conditioner and furnace. Additionally, Carrier provides cooling solutions for industrial applications such as cooling towers, chiller units and refer cars to maintain temperatures in manufacturing processes and transportation. Carrier is the #1 industry leader in the following categories:
Why do I Currently Invest?
As I said above, Carrier is one of my core positions. I started my position in Carrier shortly after they re-listed on the public markets in 2020. I was drawn to Carrier initially by the undervalued share price in the company, compared to what I thought the value was, as well as the dividend.
Working in manufacturing, I was aware of the far reaches of the Carrier name as a provider for chiller units in my facility as well as many HVAC units in homes. It was a company I understood, interacted with, and saw the scope and stability of the business. My trades are currently linking to Commonstock, but you can see how much $CARR makes up my portfolio below:
I have been handsomely rewarded for holding $CARR for nearly 3 years. Share price of my initial investment has grown by over 180%, and is outpacing the S&P 500 by 100% in that time. $CARR is the #1 listing in the S&P Industrials sector since spin-off.
Additionally, the dividends have been steadily rolling in, and growing. In just the past two years, dividend payout has tripled from $0.16 per share in 2020 to $0.48 per share in 2021. One of the 4 capital deployment strategies in Carrier's Investor Day Presentation is to continue to grow the dividend, so I expect this trend to continue.
Why Will I Continue to Invest?
There are many tailwinds that will continue to support and propel Carrier's business in the years to come. There are two things that come to mind - sustainability and technology.
As the world goes green, so is Carrier. HVAC, especially cooling, is a highly energy intensive process. Huge investments are being made to drive towards a greener future, and Carrier is able to capitalize on these investments by offering less energy intensive products. $CARR is projecting a 9% CAGR in green infrastructure investments in the next few years. Carrier already has its vision for Sustainable Buildings, and the market opportunity for this transformation.
Not only does Carrier have the roadmap, but they also have the products to back it up and make the transformation happen:
Climate and environment control go hand in hand with innovation in healthcare, technology and manufacturing.
In research labs where healthcare advances are being developed, clean, controlled environments are required to ensure a sterile environment.
As technology, especially information technology, advances, cooling switch rooms, server rooms, and other applications is critical to ensure equipment functions properly.
Finally, as manufacturing advances and manufacturing processes become more temperature dependent, Carrier will be essential. Cooling reactors, raw materials, tanks, finished goods, all require cooling via chillers and cooling towers that Carrier provides
In summary, Carrier is a global leader in industrial and residential HVAC and cooling applications. $CARR has provided great share price appreciation as well as a growing dividend since its spinoff in 2020. Finally, Carrier has many tailwinds as the globe transitions to green alternatives and the need for climate control and cooling continues to increase.
What are your thoughts? Do you invest in $CARR. Are you thinking of adding to your watchlist?
Link to full Investor Day Presentation:
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Good stuff. Currently on my watchlist bc I haven’t done enough research on it yet, but I like what I know of them and I’m bullish on the companies that are going to make housing and buildings more energy efficient especially when it comes to heating and cooling. Currently invested in AOS and JCI. My one concern with CARR is HVAC is a bit commoditized, (lots of suppliers/not a lot of differentiation), and cyclical, but I think you make a good case as to why CARR could be the most investable leader in the space. The other company I’m considering is $TT Trane.