HONEYWELL INTERNATIONAL INC (HON) Stock Fundamental Analysis
NASDAQ:HON - Nasdaq - US4385161066 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to HON. HON was compared to 8 industry peers in the Industrial Conglomerates industry. While HON has a great profitability rating, there are some minor concerns on its financial health. HON has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year HON was profitable.
HON had a positive operating cash flow in the past year.
HON had positive earnings in each of the past 5 years.
Each year in the past 5 years HON had a positive operating cash flow.
1.2 Ratios
HON has a Return On Assets of 7.59%. This is amongst the best in the industry. HON outperforms 87.50% of its industry peers.
HON has a Return On Equity of 29.78%. This is in the better half of the industry: HON outperforms 75.00% of its industry peers.
HON has a better Return On Invested Capital (11.18%) than 75.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HON is above the industry average of 9.46%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.59% | ||
| ROE | 29.78% | ||
| ROIC | 11.18% |
ROA(3y)8.25%
ROA(5y)8.15%
ROE(3y)31.74%
ROE(5y)30.46%
ROIC(3y)12.42%
ROIC(5y)12.06%
1.3 Margins
HON's Profit Margin of 14.82% is amongst the best of the industry. HON outperforms 87.50% of its industry peers.
HON's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 21.28%, HON belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of HON has grown nicely.
HON's Gross Margin of 38.09% is fine compared to the rest of the industry. HON outperforms 75.00% of its industry peers.
In the last couple of years the Gross Margin of HON has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.28% | ||
| PM (TTM) | 14.82% | ||
| GM | 38.09% |
OM growth 3Y0.41%
OM growth 5Y1.57%
PM growth 3Y-2.75%
PM growth 5Y-2.4%
GM growth 3Y6%
GM growth 5Y2.48%
2. Health
2.1 Basic Checks
HON has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for HON has been reduced compared to 1 year ago.
The number of shares outstanding for HON has been reduced compared to 5 years ago.
HON has a worse debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of HON is 6.30, which is on the high side as it means it would take HON, 6.30 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of HON (6.30) is better than 87.50% of its industry peers.
A Debt/Equity ratio of 1.55 is on the high side and indicates that HON has dependencies on debt financing.
HON has a better Debt to Equity ratio (1.55) than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.55 | ||
| Debt/FCF | 6.3 | ||
| Altman-Z | N/A |
ROIC/WACC1.34
WACC8.35%
2.3 Liquidity
A Current Ratio of 1.31 indicates that HON should not have too much problems paying its short term obligations.
HON's Current ratio of 1.31 is fine compared to the rest of the industry. HON outperforms 75.00% of its industry peers.
A Quick Ratio of 1.01 indicates that HON should not have too much problems paying its short term obligations.
HON's Quick ratio of 1.01 is fine compared to the rest of the industry. HON outperforms 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.31 | ||
| Quick Ratio | 1.01 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.76% over the past year.
HON shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.71% yearly.
Looking at the last year, HON shows a small growth in Revenue. The Revenue has grown by 5.01% in the last year.
The Revenue has been growing slightly by 0.96% on average over the past years.
EPS 1Y (TTM)6.76%
EPS 3Y6.74%
EPS 5Y3.71%
EPS Q2Q%-5%
Revenue 1Y (TTM)5.01%
Revenue growth 3Y3.83%
Revenue growth 5Y0.96%
Sales Q2Q%6.86%
3.2 Future
Based on estimates for the next years, HON will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.01% on average per year.
Based on estimates for the next years, HON will show a small growth in Revenue. The Revenue will grow by 5.71% on average per year.
EPS Next Y6.83%
EPS Next 2Y8.33%
EPS Next 3Y6.8%
EPS Next 5Y11.01%
Revenue Next Year7.62%
Revenue Next 2Y6.36%
Revenue Next 3Y6.2%
Revenue Next 5Y5.71%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 21.57, HON is valued on the expensive side.
75.00% of the companies in the same industry are more expensive than HON, based on the Price/Earnings ratio.
HON's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 30.30.
With a Price/Forward Earnings ratio of 20.19, HON is valued on the expensive side.
Based on the Price/Forward Earnings ratio, HON is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
HON is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.06, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.57 | ||
| Fwd PE | 20.19 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HON is on the same level as its industry peers.
HON's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. HON is cheaper than 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.83 | ||
| EV/EBITDA | 16.05 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
HON has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.16
PEG (5Y)5.81
EPS Next 2Y8.33%
EPS Next 3Y6.8%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.20%, HON has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.34, HON pays a better dividend. On top of this HON pays more dividend than 87.50% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, HON has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
5.2 History
The dividend of HON has a limited annual growth rate of 5.63%.
HON has paid a dividend for at least 10 years, which is a reliable track record.
HON has decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.63%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
HON pays out 50.87% of its income as dividend. This is a bit on the high side, but may be sustainable.
HON's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP50.87%
EPS Next 2Y8.33%
EPS Next 3Y6.8%
NASDAQ:HON (2/21/2025, 1:11:05 PM)
211.16
-0.19 (-0.09%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryIndustrial Conglomerates
Earnings (Last)
Earnings (Next)
Inst Owners80.37%
Inst Owner Change6.07%
Ins Owners0.04%
Ins Owner Change0%
Market Cap137.31B
Analysts72.9
Price Target250.32 (18.55%)
Short Float %1.07%
Short Ratio1.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
Yearly Dividend4.46
Dividend Growth(5Y)5.63%
DP50.87%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.72%
Min EPS beat(2)2.07%
Max EPS beat(2)5.37%
EPS beat(4)4
Avg EPS beat(4)3.02%
Min EPS beat(4)2.07%
Max EPS beat(4)5.37%
EPS beat(8)7
Avg EPS beat(8)2.32%
EPS beat(12)10
Avg EPS beat(12)2.12%
EPS beat(16)13
Avg EPS beat(16)2.16%
Revenue beat(2)1
Avg Revenue beat(2)-0.56%
Min Revenue beat(2)-2.72%
Max Revenue beat(2)1.6%
Revenue beat(4)2
Avg Revenue beat(4)-0.13%
Min Revenue beat(4)-2.72%
Max Revenue beat(4)1.6%
Revenue beat(8)3
Avg Revenue beat(8)-0.45%
Revenue beat(12)5
Avg Revenue beat(12)-0.36%
Revenue beat(16)7
Avg Revenue beat(16)-0.3%
PT rev (1m)-0.69%
PT rev (3m)8.25%
EPS NQ rev (1m)-10.54%
EPS NQ rev (3m)-10.92%
EPS NY rev (1m)-6.03%
EPS NY rev (3m)-5.98%
Revenue NQ rev (1m)-3.04%
Revenue NQ rev (3m)-1.41%
Revenue NY rev (1m)-0.65%
Revenue NY rev (3m)-1.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.57 | ||
| Fwd PE | 20.19 | ||
| P/S | 3.57 | ||
| P/FCF | 27.83 | ||
| P/OCF | 22.52 | ||
| P/B | 7.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.05 |
EPS(TTM)9.79
EY4.64%
EPS(NY)10.46
Fwd EY4.95%
FCF(TTM)7.59
FCFY3.59%
OCF(TTM)9.38
OCFY4.44%
SpS59.2
BVpS29.46
TBVpS-14.34
PEG (NY)3.16
PEG (5Y)5.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.59% | ||
| ROE | 29.78% | ||
| ROCE | 15.19% | ||
| ROIC | 11.18% | ||
| ROICexc | 13.77% | ||
| ROICexgc | 34.65% | ||
| OM | 21.28% | ||
| PM (TTM) | 14.82% | ||
| GM | 38.09% | ||
| FCFM | 12.81% |
ROA(3y)8.25%
ROA(5y)8.15%
ROE(3y)31.74%
ROE(5y)30.46%
ROIC(3y)12.42%
ROIC(5y)12.06%
ROICexc(3y)15.48%
ROICexc(5y)15.63%
ROICexgc(3y)37.76%
ROICexgc(5y)37.73%
ROCE(3y)16.63%
ROCE(5y)16.24%
ROICexcg growth 3Y-1.97%
ROICexcg growth 5Y-2.79%
ROICexc growth 3Y-3.93%
ROICexc growth 5Y-4.18%
OM growth 3Y0.41%
OM growth 5Y1.57%
PM growth 3Y-2.75%
PM growth 5Y-2.4%
GM growth 3Y6%
GM growth 5Y2.48%
F-Score6
Asset Turnover0.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.55 | ||
| Debt/FCF | 6.3 | ||
| Debt/EBITDA | 3.12 | ||
| Cap/Depr | 87.26% | ||
| Cap/Sales | 3.02% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 63.99% | ||
| Profit Quality | 86.47% | ||
| Current Ratio | 1.31 | ||
| Quick Ratio | 1.01 | ||
| Altman-Z | N/A |
F-Score6
WACC8.35%
ROIC/WACC1.34
Cap/Depr(3y)79.74%
Cap/Depr(5y)80.57%
Cap/Sales(3y)2.67%
Cap/Sales(5y)2.68%
Profit Quality(3y)84.42%
Profit Quality(5y)91.4%
High Growth Momentum
Growth
EPS 1Y (TTM)6.76%
EPS 3Y6.74%
EPS 5Y3.71%
EPS Q2Q%-5%
EPS Next Y6.83%
EPS Next 2Y8.33%
EPS Next 3Y6.8%
EPS Next 5Y11.01%
Revenue 1Y (TTM)5.01%
Revenue growth 3Y3.83%
Revenue growth 5Y0.96%
Sales Q2Q%6.86%
Revenue Next Year7.62%
Revenue Next 2Y6.36%
Revenue Next 3Y6.2%
Revenue Next 5Y5.71%
EBIT growth 1Y9.04%
EBIT growth 3Y4.26%
EBIT growth 5Y2.54%
EBIT Next Year26.23%
EBIT Next 3Y13.98%
EBIT Next 5Y10.99%
FCF growth 1Y14.69%
FCF growth 3Y-1.38%
FCF growth 5Y-4.03%
OCF growth 1Y14.18%
OCF growth 3Y0.32%
OCF growth 5Y-2.44%