Johnson Controls International plc (JCI): Among the Growing Dividend Stocks with Low PE Ratios

We recently published a list of the 30 Growing Dividend Stocks with Low PE Ratios. In this article, we are going to take a look at where Johnson Controls International plc (NYSE:JCI) stands against other growing dividend stocks.

Value stocks are enjoying a rare period of strength amid this year’s broader market downturn. With earnings season approaching, it remains to be seen whether their recent edge over high-growth stocks will hold.

The S&P Value Index—which includes sectors like banking, consumer staples, and healthcare, featuring companies that trade at relatively low valuations—has fallen around 9% this year. That’s a smaller drop compared to the more than 15% decline seen in the growth-focused counterpart.

Concerns over steep valuations in the tech sector, coupled with a wave of risk aversion triggered by tariffs, have pushed investors to shift from growth to value. While similar shifts haven’t lasted long in the past, some investors believe that this time could be different, as expectations for value-oriented firms are modest enough that they may exceed them when earnings reports begin next month. Dan Morgan, senior portfolio manager at Synovus Trust, made the following comment about value investing:

“The bar has been set pretty low for value stocks compared to the uncertainty surrounding growth names and their ability to deliver on earnings estimates. If value can at least match or slightly beat expectations, the runway is clear for them.”

According to data from Bloomberg Intelligence, analysts are forecasting a 12% decline in first-quarter earnings for value companies compared to the same period last year, while growth companies are expected to post a 20% increase.

Supporters of value stocks believe that these lower expectations are already factored into their relatively modest valuations. On the other hand, optimism surrounding growth stocks—particularly in the tech sector—has soared in recent years, largely driven by enthusiasm over advancements in artificial intelligence.

Historically, value stocks have lagged behind. Over the past 20 years, the S&P 500 Value Index has only outperformed its growth counterpart five times on an annual basis. During that period, the value index climbed 202%, while the growth index surged by 600%. Michael O’Rourke, chief market strategist at JonesTrading Institutional Services, made the following statement:

“Growth is about 40% more expensive; this outperformance of value was very long overdue. Due to the incredible strength of the Magnificent Seven, too many investors crowded into growth thinking it won’t correct.”

Investors often turn to dividend stocks when looking at companies with lower valuations. Dan Lefkovitz, a strategist at Morningstar Indexes,  pointed out that dividend-growth stocks—those known for consistently raising their payouts—have underperformed the broader market in 2024. He attributed this to a market that has largely been driven by a handful of fast-growing tech names. However, he also remarked that while dividend-paying stocks may trail during such growth-led rallies, they tend to hold up better during market downturns, as seen in 2022 and 2018.

Companies that consistently raise their dividends are often both profitable and financially stable—traits that become especially important during times of economic downturn.

Our Methodology

For this list, we focused on dividend-paying companies that have consistently paid dividends over the years and have also demonstrated a track record of increasing their payouts. From that group, we considered stocks with forward P/E ratios below 25, as of April 22. The stocks are ranked in ascending order of their P/E ratios.

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Johnson Controls International plc (NYSE:JCI)

Forward P/E Ratio as of April 22: 20.7

Johnson Controls International plc (NYSE:JCI) is an Ireland-based multinational conglomerate that specializes in building technologies and solutions and also offers energy storage solutions. The company is well-positioned for future revenue growth, thanks to its HVAC systems and building automation solutions that help clients boost energy efficiency and lower emissions, key steps toward achieving net-zero targets. The company’s OpenBlue technology platform also plays a central role by using artificial intelligence, advanced analytics, and IoT to optimize building operations in real time. On top of that, demand for its HVAC offerings is surging in the data center sector, driven by the expanding use of AI technologies.

In the first quarter of fiscal 2025, Johnson Controls International plc (NYSE:JCI) reported $5.4 billion in sales, marking a 4% increase year-over-year on a reported basis and a 10% gain organically. GAAP income from continuing operations reached $363 million, while adjusted income totaled $426 million. Excluding the impact of acquisitions and foreign exchange, the company saw an 18% increase in orders compared to the previous year, and its order backlog grew 12%, reaching $9.3 billion.

Johnson Controls International plc (NYSE:JCI) also maintained a healthy cash position, generating $249 million in operating cash flow and $133 million in free cash flow. On an adjusted basis, free cash flow stood at $603 million. During the quarter, it returned $245 million to shareholders through dividend payments. It offers a quarterly dividend of $0.37 per share and has a dividend yield of 1.93%, as of April 22. The company has remained committed to its shareholder value and has never missed a dividend in 137 years.

Overall, JCI ranks 27th on our list of the best growing dividend stocks with low P/E ratios. While we acknowledge the potential of JCI as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than JCI but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.

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Disclosure: None. This article is originally published at Insider Monkey.