Carrier Global (CARR) increased its dividend by 6.7% to $0.24 per share, with a free cash flow of $2.1B covering 38% of payouts. Residential sales dropped by 38%, but commercial HVAC orders surged by 50%, driven by data center project wins. Carrier achieved a 23.1% dividend CAGR over five years compared to Trane’s 12.2% rate, despite Trane’s higher profit margins.
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Carrier Global Corporation (NYSE: CARR) raised its dividend to $0.24 per share, up 6.7% from the prior rate. The company returned $3.7B to shareholders in 2025, with a free cash flow of $2.1B covering the dividend. The dividend yield is 1.39%, and 2026 projections include $22B in sales and earnings per share around $2.80.
Carrier’s fourth-quarter results showed revenue declining 6% year-over-year to $4.84B, with adjusted EPS falling 37% to $0.34. Residential sales dropped by 38%, but commercial HVAC orders surged by 50%, driven by data center projects. The company expects $1.5B in data center revenue in 2026 and continued growth in aftermarket services.
CEO David Gitlin and CFO Patrick Goris displayed confidence in Carrier’s dividend sustainability, making significant insider purchases. The company’s stock trades at 40 times trailing earnings and 24 times forward earnings, with a current price of $67.01. Analysts view the stock positively, with a consensus target of $71.85.
Carrier faces risks from continued residential market weakness and operating margin pressure. Cost reductions and operational improvements are ongoing. The pending Riello divestiture will impact revenue, but profitability should benefit. Commodity headwinds remain a concern despite hedging strategies.
Carrier’s dividend sustainability relies on growth in commercial HVAC, data centers, and aftermarket services. CEO Gitlin emphasizes capital allocation priorities, focusing on high-return opportunities and shareholder returns. Free cash flow is expected to support dividends and share repurchases, reinforcing the dividend’s security.
While Carrier’s dividend growth is strong, the low yield of 1.39% may deter income-focused investors. The stock’s recent surge to overbought levels suggests caution, but the dividend appears secure through diversified revenue streams and strong cash generation. The company’s positioning in data center infrastructure offers growth potential.
Read more at Yahoo Finance: Carrier Global’s Quiet Dividend Strategy Deserves Attention