August 31, 2023
Top 10 Stock Johnson Controls Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Johnson Controls – Top 10 Stock in Water Technology
Johnson Controls is listed as a top 10 stock on August 31, 2023 in the market index Water Tech because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 55 (high 55% performer), Obermatt assesses an overall buy recommendation for Johnson Controls on August 31, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Building Products |
| Index | Dividends USA, Energy Efficient, Human Rights, Water Tech, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Johnson Controls Buy
| 360 METRICS | August 31, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 53 |
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| SAFETY | ||||||||
| SAFETY | 23 |
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| SENTIMENT | ||||||||
| SENTIMENT | 42 |
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| 360° VIEW | ||||||||
| 360° VIEW | 55 |
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ANALYSIS: With an Obermatt 360° View of 55 (better than 55% compared with alternatives), overall professional sentiment and financial characteristics for the stock Johnson Controls are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Johnson Controls. The consolidated Value Rank has an attractive rank of 88, which means that the share price of Johnson Controls is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 88% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 53, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 42. Professional investors are more confident in 58% other stocks. Worryingly, the company has risky financing, with a Safety rank of 23. This means 77% of comparable companies have a safer financing structure than Johnson Controls. ...read more
RECOMMENDATION: With a consolidated 360° View of 55, Johnson Controls is better positioned than 55% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 88 and the Growth Rank above-average at 53, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 42. In addition, the company financing structure is on the riskier side (Safety Rank of 23). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Johnson Controls only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 42 (better than 42% compared with alternatives), overall professional sentiment and engagement for the stock Johnson Controls is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for Johnson Controls. Analyst Opinions are at a rank of 57 (better than 57% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 84 which means that currently, professional investors hold more stock in this company than in 84% of alternative investment opportunities. But Analyst Opinions Change has a rank of 15, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in Johnson Controls. Furthermore, Market Pulse has a rank of 25, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 75% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 42 (less encouraging than 58% compared with investment alternatives), Johnson Controls has a reputation among professional investors that is below that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: Johnson Controls Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 88 (better than 88% compared with alternatives) for 2023, Johnson Controls shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Johnson Controls. Price-to-Sales is 53 which means that the stock price compared with what market professionals expect for future sales is lower than for 53% of comparable companies, indicating a good value for Johnson Controls's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 74% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 57. Compared with other companies in the same industry, dividend yields of Johnson Controls are expected to be higher than for 96% of all competitors (a Dividend Yield rank of 96). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 88, is a buy recommendation based on Johnson Controls's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Johnson Controls based on its detailed value metrics.
Growth Strategy: Johnson Controls Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 53 (better than 53% compared with alternatives), Johnson Controls shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for Johnson Controls. Profit Growth, with a rank of 60 (better than 60% of its competitors), and Capital Growth, with a rank of 64, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 37, which means that, currently, professionals expect the company to grow less than 63% of its competitors, and Stock Returns are at a rank of 43. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 53, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Johnson Controls Debt Financing Safety risky
| SAFETY METRICS | August 31, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 46 |
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| REFINANCING | ||||||||
| REFINANCING | 9 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 60 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 23 |
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ANALYSIS: With an Obermatt Safety Rank of 23 (better than 23% compared with alternatives), the company Johnson Controls has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Johnson Controls is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Johnson Controls. Liquidity is at 60, meaning the company generates more profit to service its debt than 60% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 9, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 91% of its competitors. Leverage is also high at a rank of 46, which means that the company has an above-average debt-to-equity ratio. It has more debt than 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 23 (worse than 77% compared with alternatives), Johnson Controls has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Johnson Controls Above-Average Financial Performance
| COMBINED PERFORMANCE | August 31, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 53 |
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| SAFETY | ||||||||
| SAFETY | 60 |
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| COMBINED | ||||||||
| COMBINED | 57 |
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ANALYSIS: With an Obermatt Combined Rank of 57 (better than 57% compared with investment alternatives), Johnson Controls (Building Products, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Johnson Controls are a good value (attractively priced) with a consolidated Value Rank of 88 (better than 88% of alternatives), show above-average growth (Growth Rank of 53) but are riskily financed (Safety Rank of 23), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 57, is a buy recommendation based on Johnson Controls's financial characteristics. As the company Johnson Controls's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 88) and above-average growth (Obermatt Growth Rank of 53), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 23) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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