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Tyco (TYC) Shows Promise for Healthy Long-Term Growth
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On Jun 14, Zacks Investment Research updated the research report on security and protection services provider Tyco International Ltd. .
Tyco provides the latest fire protection and security products and services to more than three million customers across the globe. The company has more than 57,000 employees in over 900 locations, serving various end markets, including commercial, institutional, governmental, retail, industrial and energy, residential and small businesses.
Growth Drivers
Tyco has been actively repositioning its portfolio to build a right mix of businesses and maximize long-term value for its shareholders. The company’s acquisition pipeline remains attractive and complements its existing businesses. During second-quarter fiscal 2016, Tyco closed the acquisition of the consumer analytics firm, ShopperTrak for $175 million. This strategic move positions Tyco as a one-stop-solution provider of monitoring systems, data and analytics capabilities to retail clients.
During second-quarter fiscal 2016, Tyco also signed a merger deal with the global diversified technology company, Johnson Controls Inc. (JCI - Free Report) . Per the deal, Tyco will own 44% equity in the joint company. Post merger, the companies plan to strengthen their building products and technology, integrated solutions and energy storage portfolios. Tyco believes that this transaction will help it to expand its global footprint in the building-technology market, enhance shareholder value and develop innovative solutions.
With an improved and enriched product portfolio, the transaction creates immediate opportunities for near-term growth through cross-selling, complementary channel networks, and expanded global reach for established businesses. The new company will enjoy synergistic benefits worth $500 million through mutual sharing of resources over the first three years after the closing of the transaction. These annual cost synergies are expected to be achieved through higher efficiencies, elimination of redundancies, integration of the global branch networks, and leveraging the combined scale of the business platform. In addition, the transaction is expected to create at least $150 million in annual tax synergies.
We are bullish on the company’s fortunes based on the relative stability of the global security and fire markets, as well as high and predictable cash generation and limited balance sheet risks. Further, the company has consistently returned significant cash to shareholders through share buybacks and dividends. Tyco also continues to invest in its businesses to strengthen long-term competitive capabilities for both products and services.
Other Stocks to Consider
Tyco currently has a Zacks Rank #4 (Sell). A couple of stocks that look promising in the same industry include Alarm.Com Holdings, Inc. (ALRM - Free Report) and Ascent Capital Group, Inc. , both sporting a Zacks Rank #1 (Strong Buy).
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Tyco (TYC) Shows Promise for Healthy Long-Term Growth
On Jun 14, Zacks Investment Research updated the research report on security and protection services provider Tyco International Ltd. .
Tyco provides the latest fire protection and security products and services to more than three million customers across the globe. The company has more than 57,000 employees in over 900 locations, serving various end markets, including commercial, institutional, governmental, retail, industrial and energy, residential and small businesses.
Growth Drivers
Tyco has been actively repositioning its portfolio to build a right mix of businesses and maximize long-term value for its shareholders. The company’s acquisition pipeline remains attractive and complements its existing businesses. During second-quarter fiscal 2016, Tyco closed the acquisition of the consumer analytics firm, ShopperTrak for $175 million. This strategic move positions Tyco as a one-stop-solution provider of monitoring systems, data and analytics capabilities to retail clients.
During second-quarter fiscal 2016, Tyco also signed a merger deal with the global diversified technology company, Johnson Controls Inc. (JCI - Free Report) . Per the deal, Tyco will own 44% equity in the joint company. Post merger, the companies plan to strengthen their building products and technology, integrated solutions and energy storage portfolios. Tyco believes that this transaction will help it to expand its global footprint in the building-technology market, enhance shareholder value and develop innovative solutions.
With an improved and enriched product portfolio, the transaction creates immediate opportunities for near-term growth through cross-selling, complementary channel networks, and expanded global reach for established businesses. The new company will enjoy synergistic benefits worth $500 million through mutual sharing of resources over the first three years after the closing of the transaction. These annual cost synergies are expected to be achieved through higher efficiencies, elimination of redundancies, integration of the global branch networks, and leveraging the combined scale of the business platform. In addition, the transaction is expected to create at least $150 million in annual tax synergies.
TYCO INTL PLC Price and Consensus
TYCO INTL PLC Price and Consensus | TYCO INTL PLC Quote
We are bullish on the company’s fortunes based on the relative stability of the global security and fire markets, as well as high and predictable cash generation and limited balance sheet risks. Further, the company has consistently returned significant cash to shareholders through share buybacks and dividends. Tyco also continues to invest in its businesses to strengthen long-term competitive capabilities for both products and services.
Other Stocks to Consider
Tyco currently has a Zacks Rank #4 (Sell). A couple of stocks that look promising in the same industry include Alarm.Com Holdings, Inc. (ALRM - Free Report) and Ascent Capital Group, Inc. , both sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>