Bloomberg News columnist Brooke Sutherland recently wrote an article about Honeywell International pursuit of United Technologies. The deal is $108 a share or $105 billion. United Technologies said no because of possible antitrust objections. However the writer believes for the industrial sector to expand there no many other options. The slow growth environment as well as all the cost cuts have run their course, if a company is to grow then they have to expand externally. If Honeywell does not succeed there are other companies of various sizes which Honeywell could easily buy given of the $105 billion cash and stock bid – 39% is in cash. Companies which are named in the article include: Crane, Moog, Lennox International, Meggitt, Ingersoll-Rand or Pentair. There are also assets of commodity producers which have been hurt by the lower commodity prices.

Linking to dividend paying stocks, in all cycles there will be companies which can buy other companies and those needing to pay down debt. There are opportunities, the best method to be involved is choose the best of the breed companies in case the company is not acquired. If they are acquired you will make a significant capital gain, if not the dividends of the company are sustainable for the next round of mergers.

There are more questions than answers, till the next time – to raising questions.