NYSE:HON

Stock Analysis Report

Executive Summary

Honeywell International Inc. operates as a diversified technology and manufacturing company worldwide.

Rewards

Trading at 9% below its fair value

Earnings are forecast to grow 5.13% per year

Earnings grew by 149.6% over the past year

Pays a high and reliable dividend of 2%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Solid track record established dividend payer.


Similar Companies

Share Price & News

How has Honeywell International's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HON has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.3%

HON

-3.8%

US Industrials

-2.7%

US Market


1 Year Return

23.5%

HON

14.6%

US Industrials

21.2%

US Market

Return vs Industry: HON exceeded the US Industrials industry which returned 21.6% over the past year.

Return vs Market: HON exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

HONIndustryMarket
7 Day-5.3%-3.8%-2.7%
30 Day-1.7%0.09%0.09%
90 Day0.2%8.1%6.9%
1 Year26.0%23.5%17.9%14.6%23.8%21.2%
3 Year61.6%45.7%-13.4%-21.3%48.1%38.6%
5 Year102.5%73.9%8.7%-6.5%72.5%53.4%

Price Volatility Vs. Market

How volatile is Honeywell International's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Honeywell International undervalued compared to its fair value and its price relative to the market?

20.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HON ($180.45) is trading below our estimate of fair value ($198.35)

Significantly Below Fair Value: HON is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HON is good value based on its PE Ratio (20.8x) compared to the Industrials industry average (27.3x).

PE vs Market: HON is poor value based on its PE Ratio (20.8x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: HON is poor value based on its PEG Ratio (4.1x)


Price to Book Ratio

PB vs Industry: HON is overvalued based on its PB Ratio (7.1x) compared to the US Industrials industry average (4.3x).


Next Steps

Future Growth

How is Honeywell International forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

4.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HON's forecast earnings growth (5.1% per year) is above the savings rate (1.7%).

Earnings vs Market: HON's earnings (5.1% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: HON's earnings are forecast to grow, but not significantly.

Revenue vs Market: HON's revenue (3.7% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: HON's revenue (3.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HON's Return on Equity is forecast to be very high in 3 years time (45.5%).


Next Steps

Past Performance

How has Honeywell International performed over the past 5 years?

3.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HON has high quality earnings.

Growing Profit Margin: HON's current net profit margins (17.1%) are higher than last year (5.9%).


Past Earnings Growth Analysis

Earnings Trend: HON's earnings have grown by 3.5% per year over the past 5 years.

Accelerating Growth: HON's earnings growth over the past year (149.6%) exceeds its 5-year average (3.5% per year).

Earnings vs Industry: HON earnings growth over the past year (149.6%) exceeded the Industrials industry 9.3%.


Return on Equity

High ROE: Whilst HON's Return on Equity (34.84%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Honeywell International's financial position?


Financial Position Analysis

Short Term Liabilities: HON's short term assets ($26.2B) exceed its short term liabilities ($19.9B).

Long Term Liabilities: HON's short term assets ($26.2B) exceed its long term liabilities ($21.9B).


Debt to Equity History and Analysis

Debt Level: HON's debt to equity ratio (100.5%) is considered high.

Reducing Debt: HON's debt to equity ratio has increased from 46.2% to 100.5% over the past 5 years.

Debt Coverage: HON's debt is well covered by operating cash flow (31.7%).

Interest Coverage: HON's interest payments on its debt are well covered by EBIT (76x coverage).


Balance Sheet

Inventory Level: HON has a low level of unsold assets or inventory.

Debt Coverage by Assets: HON's debt is covered by short term assets (assets are 1.4x debt).


Next Steps

Dividend

What is Honeywell International's current dividend yield, its reliability and sustainability?

2.07%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: HON's dividend (2%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: HON's dividend (2%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: HON's dividends per share have been stable in the past 10 years.

Growing Dividend: HON's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37.8%), HON's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HON's dividends in 3 years are forecast to be well covered by earnings (41.8% payout ratio).


Next Steps

Management

What is the CEO of Honeywell International's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Darius Adamczyk (53yo)

2.8yrs

Tenure

US$19,246,604

Compensation

Mr. Darius E. Adamczyk is Chairman and Chief Executive Officer of Honeywell since April 2018, a leading software-industrial company that helps connect everything from aircraft, cars, homes and buildings, m ...


CEO Compensation Analysis

Compensation vs Market: Darius's total compensation ($USD19.25M) is above average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Darius's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.3yrs

Average Tenure

53yo

Average Age

Experienced Management: HON's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

9.9yrs

Average Tenure

67.5yo

Average Age

Experienced Board: HON's board of directors are considered experienced (9.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$1,800,05821 Aug 19
Rajeev Gautam
EntityIndividual
Role
Senior Key Executive
President and CEO of Performance Materials & Technologies
Shares10,984
Max PriceUS$163.88
SellUS$1,180,15716 Aug 19
Darius Adamczyk
EntityIndividual
Role
Chief Executive Officer
Chairman of the Board
Shares7,149
Max PriceUS$165.08
SellUS$2,276,63614 Aug 19
Jaime Chico Pardo
EntityIndividual
Role
Lead Director
Lead Director
Shares13,607
Max PriceUS$168.79
SellUS$847,90022 May 19
Vimal Kapur
EntityIndividual
Shares5,000
Max PriceUS$169.58
SellUS$7,629,05507 Mar 19
Timothy Mahoney
EntityIndividual
Shares49,443
Max PriceUS$154.30
SellUS$172,84807 Feb 19
Linnet Deily
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,162
Max PriceUS$148.75

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Anne Madden (54yo)

    Senior VP

    • Tenure: 2.3yrs
  • Darius Adamczyk (53yo)

    Chairman of the Board

    • Tenure: 2.8yrs
    • Compensation: US$19.25m
  • Mark James (57yo)

    Senior Vice President of Human Resources

    • Tenure: 12.2yrs
    • Compensation: US$7.03m
  • S. Tedjarati (57yo)

    President of Global High Growth Regions

    • Tenure: 2yrs
  • Rob Mailloux (51yo)

    VP, Controller & Principal Accounting Officer

    • Tenure: 0.5yrs
  • Rajeev Gautam (66yo)

    President and CEO of Performance Materials & Technologies

    • Compensation: US$6.66m
  • John Waldron (43yo)

    President & CEO of Safety and Productivity Solutions

    • Que Dallara (45yo)

      President & CEO of Honeywell Connected Enterprise

      • Tenure: 2.4yrs
    • Brian Cook (48yo)

      VP of Corporate Development and Global Head of M&A

      • Tenure: 2.3yrs
    • Mark Bendza

      Vice President of Investor Relations


      Board Members

      • Linnet Deily (73yo)

        Independent Director

        • Tenure: 14yrs
        • Compensation: US$335.47k
      • Jaime Chico Pardo (69yo)

        Lead Director

        • Compensation: US$342.77k
      • George Paz (63yo)

        Independent Director

        • Tenure: 11.1yrs
        • Compensation: US$330.43k
      • Kevin Burke (68yo)

        Independent Director

        • Tenure: 9.9yrs
        • Compensation: US$310.43k
      • D. Davis (67yo)

        Independent Director

        • Tenure: 14.4yrs
        • Compensation: US$317.74k
      • Clive Hollick (74yo)

        Independent Director

        • Tenure: 16.6yrs
        • Compensation: US$337.17k
      • Roger Fradin (66yo)

        Chairman of Homes & Global Distribution Business

        • Tenure: 1.9yrs
        • Compensation: US$9.98m
      • Darius Adamczyk (53yo)

        Chairman of the Board

        • Tenure: 2.8yrs
        • Compensation: US$19.25m
      • Grace Lieblein (58yo)

        Independent Director

        • Tenure: 7.1yrs
        • Compensation: US$295.66k
      • Judd Gregg (72yo)

        Independent Director

        • Tenure: 8.8yrs
        • Compensation: US$310.43k

      Company Information

      Honeywell International Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Honeywell International Inc.
      • Ticker: HON
      • Exchange: NYSE
      • Founded: 1985
      • Industry: Industrial Conglomerates
      • Sector: Capital Goods
      • Market Cap: US$124.000b
      • Shares outstanding: 714.53m
      • Website: https://www.honeywell.com

      Number of Employees


      Location

      • Honeywell International Inc.
      • 300 South Tryon Street
      • Charlotte
      • North Carolina
      • 28202
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      HONNYSE (New York Stock Exchange)YesCommon StockUSUSDSep 1985
      HONLSE (London Stock Exchange)YesCommon StockGBUSDSep 1985
      HON *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNSep 1985
      ALDDB (Deutsche Boerse AG)YesCommon StockDEEURSep 1985
      ALDXTRA (XETRA Trading Platform)YesCommon StockDEEURSep 1985
      HONSNSE (Santiago Stock Exchange)YesCommon StockCLUSDSep 1985
      HONWBAG (Wiener Boerse AG)YesCommon StockATEURSep 1985
      ALDETLX (Eurotlx)YesCommon StockITEURSep 1985
      HONBASE (Buenos Aires Stock Exchange)CEDEAR 4 REP 1 COM USD1ARARSOct 2000
      HONB34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COM USD1BRBRLAug 2012

      Biography

      Honeywell International Inc. operates as a diversified technology and manufacturing company worldwide. Its Aerospace segment supplies products, software, and services for aircrafts and vehicles. This segment offers auxiliary power units, propulsion engines, integrated avionics, environmental control and electric power systems, engine controls, flight safety, communications, navigation hardware, data and software applications, radar and surveillance systems, aircraft lighting, advanced systems and instruments, satellite and space components, and aircraft wheels and brakes; spare parts; repair, overhaul, and maintenance services; and connected solutions and data services for the aftermarket, as well as provides wireless connectivity and management and technical services. The company’s Honeywell Building Technologies segment offers products, software, solutions, and technologies, such as sensors, switches, control systems and instruments for energy management; access control; video surveillance; fire products; remote patient monitoring systems; advanced software applications; and installation, maintenance and upgrades of systems. Its Performance Materials and Technologies segment develops and manufactures process technology products, including catalysts and adsorbents, equipment, and consulting services. The company’s Safety and Productivity Solutions segment provides products, software, and connected solutions. Its safety products comprise personal protection equipment, apparel, gear, and footwear; gas detection technology; and cloud-based notification and emergency messaging. This segment’s productivity solutions products and services include mobile devices and software; supply chain and warehouse automation equipment, software and solutions; custom-engineered sensors, switches, and controls; and software-based data and asset management productivity solutions. Honeywell International Inc. was incorporated in 1985 and is headquartered in Charlotte, North Carolina. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/27 23:40
      End of Day Share Price2020/01/27 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.