Johnson Controls

Johnson Controls, Inc. is an American company that manufactures and sells products and services for optimizing energy and operational efficiencies in buildings, automotive batteries, electronics and interior systems for automobiles. 

The corporate structure of Johnson Controls has evolved over time and today the company’s operations are segmented into four business units: Building Efficiency, Global WorkPlace Solutions, Power Solutions and Automotive Experience.

1. Building Efficiency. The Building Efficiency business unit designs, produces, installs and services heating, ventilation and air conditioning systems, industrial refrigeration, building management systems, fire and security systems and mechanical equipment for commercial and residential buildings. The brands produced under this business unit are York, Metasys, Panoptix, Frick and Sabroe. 
2. Global WorkPlace Solutions. The Global WorkPlace Solutions business unit provides outsourced facilities management services. It also manages corporate real estate on behalf of its customers including acquiring and disposing of property, administering leases and managing building related projects such as equipment replacements.
3. Power Solutions. The Power Solutions business unit designs and manufactures automotive batteries to passenger cars, heavy and light duty trucks, utility vehicles, motorcycles, golf carts and boats. It supplies more than 1/3 of the world’s lead-acid batteries to automakers and aftermarket retailers including Walmart, Sears and BMW.
4. Automotive Experience. The Automotive Experience business unit supplies automotive seating, interiors and electronics to the world’s largest automakers. It also designs and manufactures seating components including mechanisms, tracks, structures foams, fabrics and trim. A separate interiors division produces overhead systems, headliners, door panels, instrument panels, and overhead and floor consoles for automotive interiors. Additionally, an electronics division designs and manufactures analog and digital instrument clusters, infotainment systems and hands free electronics. 

Johnson Controls, Inc. operates as a diversified technology and industrial company worldwide. Its Building Efficiency segment designs, produces, markets, and installs integrated heating, ventilating, and air conditioning systems, as well as building management systems, controls, and security and mechanical equipment. This segment also provides technical services, energy management consulting, and operations of real estate portfolios for the non-residential buildings market. In addition, this segment offers residential air conditioning and heating systems, and industrial refrigeration products. The company's Automotive Experience segment designs and manufactures interior products and systems for passenger cars and light trucks, including vans, pick-up trucks, and sport/crossover utility vehicles serving original equipment manufacturers. This segment offers automotive seat metal structures and mechanisms, foam, trim, fabric, and seat systems; and instrument panels, floor consoles, and door panels, as well as cockpits. The company's Power Solutions segment produces lead-acid automotive batteries for passenger car, light truck, and utility vehicles, as well as offers advanced battery technologies to power Start-Stop, hybrid, and electric vehicles. It serves automotive original equipment manufacturers and the general vehicle battery aftermarket. The company was formerly known as Johnson Electric Service Company and changed its name to Johnson Controls, Inc. in 1974. Johnson Controls, Inc. was founded in 1885 and is headquartered in Milwaukee, Wisconsin. (Summary) (Company) (Daily Chart)

The Fundamentals

22 March 2015
Price $50.40
1yr Target $54.94
Analysts 17
1yr Cap Gain 9.00%
Dividend $1.04
Yield 2.06%
1yr Est Tot Return 11.06%

3yr DivGR 11.08%
5yr DivGR 11.09%
P/E 22.70
PEG 1.92

Market Cap $33.13 Bil
Beta 1.68
EPS (ttm) $2.22
Payout Ratio 46.84%
EPS next yr $4.11
Forward P/E 12.27
Debt/Equity 0.53
ROA 3.90%
ROE 11.00%
ROI 9.60%
Sales $42.92 Bil
Income $1.49 Bil
Profit Margin 3.47%

Revenues, Earnings and Dividends


The revenues and earnings listed below are hard to look at because of their inconsistency. I generally like to see a steady and reliable increase in revenues and earnings over the years and they're just not displayed here. The only consistency is in the fairly increase in dividends buy even in this case the dividends had to be frozen during the recession in 2009-2010.   

Year
2016 Est
2015 Est
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004

Revenues
$40.52 Bil
$41.86 Bil
$42.82 Bil
$41.41 Bil
$40.60 Bil
$40.83 Bil
$34.40 Bil
$28.49 Bil
$38.06 Bil
$34.62 Bil
$32.23 Bil
$27.47 Bil
$26.55 Bil

Earnings
$4.11
$3.60
$1.80
$1.71
$1.72
$2.06
$1.93
$-0.57
$1.63
$2.09
$1.74
$1.56
$1.41

Dividends
$
$1.04
$0.88
$0.76
$0.72
$0.64
$0.52
$0.52
$0.52
$0.36
$0.37
$0.33
$0.22

Payout Ratio
%
28.88%
48.88%
44.44%
41.86%
31.06%
26.94%
N/A
31.90%
15.72%
21.26%
21.15%
15.60%

Revenue Growth Rate
1 yr 3.40%
2 yr 2.69%
3 yr 1.58%
4 yr 5.62%
5 yr 8.49%
10 yr 4.89%

Earnings Growth Rate
1 yr  5.26%
2 yr  2.29%
3 yr -4.36%
4 yr -1.73%
5 yr N/A
10 Yr 2.47%

Dividend Growth Rate
1 yr  15.78%
2 yr 10.55%
3 yr 11.08%
4 yr 14.05%
5 yr 11.09%
10 Yr 14.86%

My Perspective

This appears to be a company operating in a very tough business - the auto parts business. The automotive industry is a very competitive industry and the auto parts supplier business is even more competitive. And that creates an environment that makes it tough to produce profits. 

At a first look at the fundamentals above, this company would seem to fit well into my investing strategy. It's this cursory look at a security that often tricks investors into unwittingly committing funds. But a closer look at previous revenues and earnings shows a lot of volatility. And those are the kind of numbers that don't fit into my investing strategy.

As a result, this is a company that I'm unable to commit any funds to at this time. For me there are just too many other companies with better numbers to invest in. And with my limited funds I need to invest in only the very best companies I can find.