Johnson Controls International plc JCI is well-positioned to benefit from strength across its segments. The company’s commitment to reward its shareholders also bodes well.
Based in Ireland, Johnson Controls is a diversified technology company and a multi-industrial leader, with customers spanning more than 150 countries. The company’s operations include the creation of intelligent buildings as well as providing efficient energy solutions and integrated infrastructure.
In the year-to-date period, the company’s shares have gained 5.4% compared with the industry’s 1.9% growth.
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Let’s delve into the factors that make this Zacks Rank #2 (Buy) company a smart investment choice at the moment.
Business Strength: Solid demand for heating, ventilation and air conditioning (HVAC) platforms in data centers and strength in controls businesses are benefiting JCI’s Building Solutions North America segment. The Building Solutions Asia Pacific segment’s performance is being aided by solid momentum in the service business. Solid momentum in service, controls, fire, security and industrial refrigeration businesses is aiding the Building Solutions EMEA/LA segment. Recovery in the Global Products segment, driven by growth in applied HVAC, fire & security, and Industrial refrigeration businesses is an added positive for the company.
Investments in Digital Offerings: Investments in digital offerings, like the OpenBlue platform, play an integral part in meeting customer needs, aiding the company. Johnson Controls expanded its suite of digital services and offerings to include connected chillers, industrial refrigeration equipment, connected controls and BAS systems. Digital integration of OpenBlue with Johnson Controls' core building systems will optimize the performance of the full HVAC system. Within the company’s OpenBlue platform, Net Zero Buildings as a Service offering, which includes a full portfolio of sustainability products tailored for various segments, boosts its long-term prospects.
Expansion Initiatives: The company solidified its product portfolio and leveraged business opportunities by adding assets. In the first quarter of fiscal 2025 (ended December 2024) and in fiscal 2024 (ended September 2024), acquisitions increased the company’s revenues by $3 million & $137 million, respectively. The acquisition of digital workplace management and Internet of Things solutions provider, FM:Systems, in July 2023 expanded OpenBlue’s digital buildings offerings, adding cloud-based software as a service digital workplace management capabilities. Synergies from the acquisition are expected to be accretive to its earnings and revenues in fiscal 2025.
Rewards to Shareholders: JCI is committed to returning value to shareholders through share repurchases and dividends. In the first quarter of fiscal 2025, Johnson Controls paid a dividend worth $245 million to its shareholders. The company also repurchased shares worth $330 million in the same period.
Other Stocks to Consider
Some other top-ranked companies are discussed below.
RBC Bearings Incorporated RBC currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
RBC delivered a trailing four-quarter average earnings surprise of 4.9%. In the past 60 days, the Zacks Consensus Estimate for RBC’s fiscal 2025 earnings has increased 1.3%.
Allegion plc ALLE presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 9.9%.
In the past 60 days, the consensus estimate for ALLE’s 2025 earnings has increased 1.6%.
Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 5.3%.
The Zacks Consensus Estimate for AIT’s fiscal 2025 earnings has improved 1.3% in the past 60 days.
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Free: See Our Top Stock And 4 Runners UpJohnson Controls International plc (JCI) : Free Stock Analysis Report
RBC Bearings Incorporated (RBC) : Free Stock Analysis Report
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
Allegion PLC (ALLE) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
