ClearBridge Dividend Strategy on Otis Worldwide
Thesis
ClearBridge added to Otis as one of its higher-conviction industrial investments. The company operates an elevator and escalator business supported by a high-margin service operation. The managers particularly value the recurring, sticky cash flows associated with that business and its ability to provide some protection against inflation. Otis aligns with the strategy's preference for durable companies generating predictable revenue across uncertain economic conditions.
“Otis, an elevator and escalator maker whose high-margin service business generates sticky, defensive cash flows and some inflation protection.”
Key risks
- Higher interest rates could weigh on economic activity and asset prices.
- Persistent inflation could increase operating costs despite service-revenue protection.