The activist investors Bill Ackman and Dan Loeb are calling for the break-up of United Technologies into three publicly traded companies–the aerospace, the elevator, and the climate-control units.
Ackman offered the following comments to the press: “Other than Berkshire Hathaway, conglomerates have not had a great track record.”
That comment is bizarre because United Technologies, the company he wants to break up, is an example of a conglomerate delivering exceptional returns. It has a forty-year track record of 15% annual compounding, turning every $1 into $340. Put $25,000 into United Technologies back in the day? Boom, $8.5 million today. Even over the past decade, the compounding has occurred at a rate of 8% annualized (while dividends have grown by 10% annualized). Various sources say different things for the dividend history, but it has been growing annually for at least the past three decades.