Updated 3/6/25
Carrier Global Corporation has built a strong reputation as a leading provider of heating, ventilation, and air conditioning (HVAC) solutions. Originally part of United Technologies before spinning off in 2020, the company has since positioned itself as a major player in both residential and commercial markets. Its commitment to energy efficiency, smart technology, and global expansion has made it a recognizable brand in climate control solutions.
For income-focused investors, Carrier offers a steady, though not particularly high, dividend. The company distributes a portion of its profits back to shareholders, but its high payout ratio suggests there may be limited room for aggressive dividend growth. Given its strategic acquisitions and ongoing debt obligations, investors should consider whether the dividend is sustainable over the long run.
📌 Key Dividend Metrics
💰 Dividend Yield: 1.38%
💵 Annual Dividend Per Share: $0.90
📈 5-Year Average Dividend Yield: Not available yet
📊 Payout Ratio: 80.74%
📅 Last Dividend Payment: February 7, 2025
🔄 Next Ex-Dividend Date: December 20, 2024
Dividend Overview
Carrier’s dividend yield sits at 1.38%, which places it in the lower range compared to other industrial companies. While this isn’t a stock that will generate substantial income for retirees or high-yield seekers, it does offer a level of consistency that appeals to long-term investors.
One concern is the payout ratio, currently at 80.74%. This means a significant chunk of the company’s earnings is being distributed as dividends, leaving less flexibility for reinvestment, expansion, or navigating economic slowdowns. Generally, companies with lower payout ratios have a better cushion to sustain and grow dividends, particularly during downturns.
Since becoming independent, Carrier has paid dividends consistently, but its short track record makes it difficult to evaluate how it might handle a prolonged economic slowdown. Investors watching this stock for income should keep an eye on future earnings trends to gauge the sustainability of payouts.
Dividend Growth and Safety
Carrier’s dividend growth has been modest so far, and there’s still some uncertainty about how much priority management places on increasing payouts versus using cash flow for expansion. The company has raised its dividend since becoming independent, but not at a pace that would excite dividend growth investors.
Cash flow trends provide a mixed outlook. The company reports over $5 billion in levered free cash flow, which is strong, but its operating cash flow is significantly lower at $563 million. This suggests that while Carrier is generating cash, a significant portion is allocated toward acquisitions, debt repayment, or other expenses.
On the positive side, HVAC systems are an essential industry, with ongoing demand driven by regulatory requirements, climate control needs, and system replacements. This provides some stability, but given that Carrier operates in a sector influenced by economic cycles, future dividend growth will depend on maintaining strong earnings and healthy cash flow.
Chart Analysis
Price Trend and Moving Averages
The stock price has experienced a strong uptrend for most of the year, peaking above $80 before entering a decline. The 50-day moving average (orange line) was acting as support during the rally but has now turned downward and is trending below the 200-day moving average (blue line). This is known as a death cross, a bearish technical signal that suggests further downside pressure or consolidation ahead.
Currently, the stock is trading just under the 200-day moving average, which is now acting as resistance. A sustained move above this level would be a positive sign, but without strong buying momentum, the stock may struggle to break higher in the short term.
Volume and Market Participation
Trading volume has been relatively stable, with a few notable spikes. The largest volume bars occurred around key turning points—most notably in mid-July during a sharp price increase and again in late October when the stock started its decline. Recent volume levels do not indicate a surge of buyers stepping in, which suggests that investor sentiment remains cautious.
If volume increases significantly on an up day, it could indicate renewed interest and signal the start of a reversal. However, low volume combined with a declining trend often leads to continued weakness.
Relative Strength Index (RSI) and Momentum
The RSI indicator, shown at the bottom of the chart, reflects a significant loss of momentum from the overbought levels seen earlier in the year. It has been moving lower but is not yet in deeply oversold territory, meaning there is still room for further downside before a potential bounce.
For momentum to shift back in favor of buyers, the RSI would need to rise above the mid-50s and hold, indicating improving strength. Right now, it remains in a neutral zone, showing that neither bulls nor bears have complete control.
Analyst Ratings
Carrier Global Corporation (CARR) has recently been the focus of various analyst evaluations, reflecting both positive and cautious sentiments regarding its future performance. The consensus 12-month price target among analysts is approximately $82.47, indicating potential growth from its current valuation.
Upgrades:
- JPMorgan Chase: On March 5, 2025, JPMorgan Chase upgraded Carrier Global from ‘Neutral’ to ‘Overweight,’ setting a price target of $78. This decision was influenced by the company’s strong position in the HVAC industry and its potential to benefit from onshoring trends, where businesses establish domestic manufacturing facilities to reduce import costs. Such developments are expected to enhance Carrier’s earnings through increased demand for its HVAC products.
- Wolfe Research: On February 24, 2025, Wolfe Research elevated Carrier Global’s rating from ‘Peer Perform’ to ‘Outperform,’ assigning a price target of $80. This upgrade reflects confidence in Carrier’s strategic initiatives and its ability to capitalize on emerging market opportunities, particularly in energy-efficient HVAC systems.
Downgrades:
- Robert W. Baird: In a report dated October 25, 2024, Robert W. Baird lowered its price target for Carrier Global from $88 to $86, maintaining an ‘Outperform’ rating. The adjustment was attributed to concerns over potential impacts from new tariffs and the company’s exposure to global supply chain disruptions, which could affect profit margins.
- Stephens: On October 28, 2024, Stephens downgraded Carrier Global from ‘Overweight’ to ‘Equal Weight,’ reducing the price target from $85 to $80. This change reflects a more cautious stance on Carrier’s near-term performance, considering potential challenges in the macroeconomic environment.
These mixed evaluations underscore the importance for investors to monitor Carrier Global’s strategic decisions and market conditions closely, as the company navigates both opportunities and challenges in the HVAC industry.
Earnings Report Summary
Carrier Global Corporation just released its latest earnings report, and there’s a lot to unpack. The company posted solid revenue growth, improved profitability, and made some big strategic moves to refine its business focus.
Fourth Quarter Performance
The final quarter of 2024 was a strong one for Carrier. The company brought in $5.15 billion in revenue, which marked a healthy 19% increase compared to the same time last year. Demand in the HVAC market continues to be strong, especially in commercial and residential sectors across the Americas.
Earnings per share (EPS) for the quarter came in at $0.54, which is a 50% jump from the previous year. That’s a promising sign that profitability is moving in the right direction.
The company’s HVAC division led the way, seeing an 11% organic sales boost. With a growing push toward energy-efficient systems and smart climate solutions, this segment continues to be the backbone of Carrier’s business.
Full-Year Highlights
For the full year, Carrier pulled in $22.5 billion in total sales, meeting expectations. The adjusted EPS for the year hit $2.50, showing that the company is managing its operations well. The adjusted operating margin expanded by 370 basis points, signaling improved cost control and profitability.
One of the biggest changes this year was Carrier’s decision to exit the Fire & Security segment. By moving away from that side of the business, the company is doubling down on its core focus—HVAC and Refrigeration. This move should allow Carrier to sharpen its expertise and put more resources into areas with the most growth potential.
Shareholder Moves and 2025 Outlook
Investors got some good news too, with an additional $3 billion added to the company’s stock buyback program. That brings the total available for repurchases to $4.7 billion, reinforcing Carrier’s commitment to returning value to shareholders.
Looking ahead, Carrier expects sales in 2025 to land between $22.5 billion and $23 billion. The company is also forecasting EPS in the range of $2.95 to $3.05, indicating confidence in continued earnings growth.
Overall, Carrier is positioning itself for long-term success by streamlining operations and focusing on its most profitable segments. While challenges remain, particularly with economic uncertainty and global supply chain pressures, the company’s latest earnings report suggests it’s heading in the right direction.
Financial Health and Stability
Carrier’s financial position is somewhat of a balancing act. The company carries a significant debt load of $12.84 billion, leading to a debt-to-equity ratio of nearly 90%. While leverage isn’t uncommon for industrial companies, it does create some risk, particularly in an environment with rising interest rates.
The company’s cash reserves of nearly $4 billion offer some financial flexibility, but it will need to manage its debt carefully to maintain balance sheet strength. Investors who prioritize dividend safety should watch whether Carrier focuses on paying down debt or continues making acquisitions, as either decision will impact long-term financial stability.
Revenue growth has been solid, up over 19% year-over-year, while earnings have surged dramatically. However, some of this growth may be tied to one-time factors, making it important to track whether Carrier can sustain earnings momentum moving forward.
Valuation and Stock Performance
Carrier’s stock price is currently hovering around $65.37. Looking at valuation, its trailing price-to-earnings (P/E) ratio is quite high at 53.58, while its forward P/E is much lower at 21.79. This suggests that analysts expect stronger earnings in the near future, which could ease concerns about the high payout ratio.
Other valuation metrics show that the stock isn’t cheap. The price-to-sales ratio sits at 2.65, and the enterprise value-to-EBITDA ratio is 15.96. While these numbers don’t indicate extreme overvaluation, they suggest that investors are pricing in continued growth.
The stock’s technical trends show that it is trading below its 50-day and 200-day moving averages, which could indicate some near-term downside risk. However, for long-term investors, valuation matters more than short-term price movements.
Risks and Considerations
1️⃣ High Payout Ratio – At over 80%, Carrier is returning a large portion of earnings to shareholders. If profits decline, the company may need to slow dividend growth or even reduce the payout.
2️⃣ Debt Load – With $12.84 billion in debt, Carrier has financial obligations that could limit its flexibility. Managing this effectively will be key for maintaining dividend stability.
3️⃣ Economic Cycles – While HVAC demand remains stable, Carrier’s performance is still tied to broader economic trends. A downturn in construction or industrial spending could impact earnings.
4️⃣ Limited Dividend History – The company has only been paying dividends since 2020, making it difficult to assess how well it will maintain payouts through different economic conditions.
5️⃣ Stock Performance – Currently trading below key technical levels, the stock could face additional short-term pressure if growth expectations are revised downward.
Final Thoughts
Carrier Global offers a reliable but moderate dividend, appealing to investors who prioritize steady income with potential for long-term growth. However, with a high payout ratio and significant debt, there are risks that dividend investors should keep in mind.
For those seeking higher-yielding dividend stocks, there may be better options with stronger income potential. That said, Carrier remains an attractive choice for investors looking for exposure to the industrial sector with a consistent, albeit lower-yielding, dividend. The company’s future ability to grow its payout will depend on how well it balances earnings growth, debt reduction, and strategic investments. Investors considering Carrier for its dividend should closely watch earnings trends, cash flow developments, and management’s financial priorities in the coming years.
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