When it comes to a world threatened by global warming, Carrier Global has more than just cold air to offer.
David Gitlin, chairman and CEO of Carrier Global (CARR), the heating and air conditioning giant, told Jim Cramer on a recent episode of Mad Money there are many long-term, secular growth trends that are driving the company.
The pandemic opened all new possibilities when it comes to creating safe indoor environments, he said. Carrier is also a leader in cold storage solutions, which are needed for vaccines and other mission critical medical supplies. That's why Carrier forecasts sales are up 6% to 8% for the year.
When asked about inflation, Gitlin said costs are rising, but Carrier is working hard to reduce the impact so when prices retreat, their gross margins will expand even more.
Real Money Pro's Bruce Kamich recently looked at Carrier's charts.
The stock suffered a bearish 'death cross' in early February "when the 50-day average declined below the slower-to-react 200-day line," Kamich wrote. "Sellers of CARR have been more aggressive than buyers for several months," he added though the potential existed for a tradable bounce, at least prior to Russia's invasion of Ukraine.
Carrier is also a cash story, Gitlin told Cramer. When the company was spun off, they had $10 billion in debt. Today, they have under $4 billion. That's why Carrier is making acquisitions and returning cash to shareholders by boosting their dividend 25% and authorizing a $1.6 billion share buyback. "Our strong cash positions now lets us play offense," Gitlin added.
Carrier, founded in 1915 manufacturing and distributing heating, ventilating and air conditioning (HVAC) systems, expanding to include manufacturing commercial refrigeration and foodservice equipment, and fire and security technologies. The historic company was acquired in 1979 by United Technologies, which also purchased another stand alone American innovator, the Otis Elevator Company. In 2020, both Carrier and Otis were spun off.
