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 7 industry peers in the Industrial Conglomerates industry. HON scores excellent points on both the profitability and health parts. This is a solid base for a good stock. HON has a correct valuation and a medium growth rate. These ratings could make HON a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
HON had positive earnings in the past year.
In the past year HON had a positive cash flow from operations.
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
The Return On Assets of HON (7.59%) is better than 85.71% of its industry peers.
HON has a Return On Equity of 30.64%. This is amongst the best in the industry. HON outperforms 85.71% of its industry peers.
The Return On Invested Capital of HON (11.06%) is better than 71.43% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HON is above the industry average of 9.37%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.59% | ||
| ROE | 30.64% | ||
| ROIC | 11.06% |
ROA(3y)8.25%
ROA(5y)8.15%
ROE(3y)32.02%
ROE(5y)30.63%
ROIC(3y)12.23%
ROIC(5y)11.94%
1.3 Margins
HON has a better Profit Margin (14.82%) than 85.71% of its industry peers.
HON's Profit Margin has declined in the last couple of years.
HON has a better Operating Margin (21.05%) than 100.00% of its industry peers.
In the last couple of years the Operating Margin of HON has remained more or less at the same level.
Looking at the Gross Margin, with a value of 38.09%, HON is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
HON's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.05% | ||
| PM (TTM) | 14.82% | ||
| GM | 38.09% |
OM growth 3Y-1.26%
OM growth 5Y0.55%
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.
Compared to 1 year ago, HON has less shares outstanding
HON has less shares outstanding than it did 5 years ago.
HON has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.26 indicates that HON is not in any danger for bankruptcy at the moment.
HON has a Altman-Z score of 3.26. This is amongst the best in the industry. HON outperforms 85.71% of its industry peers.
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.
HON has a Debt to FCF ratio of 6.30. This is amongst the best in the industry. HON outperforms 85.71% of its industry peers.
HON has a Debt/Equity ratio of 1.60. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.60, HON belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.6 | ||
| Debt/FCF | 6.3 | ||
| Altman-Z | 3.26 |
ROIC/WACC1.4
WACC7.9%
2.3 Liquidity
A Current Ratio of 1.31 indicates that HON should not have too much problems paying its short term obligations.
HON has a Current ratio (1.31) which is comparable to the rest of the industry.
HON has a Quick Ratio of 1.01. This is a normal value and indicates that HON is financially healthy and should not expect problems in meeting its short term obligations.
HON has a Quick ratio (1.01) which is comparable to the rest of the industry.
HON does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.31 | ||
| Quick Ratio | 1.01 |
3. Growth
3.1 Past
HON shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.76%.
The Earnings Per Share has been growing slightly by 3.71% on average over the past years.
HON shows a small growth in Revenue. In the last year, the Revenue has grown by 5.01%.
HON shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.96% yearly.
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 8.61% on average per year.
HON is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.36% yearly.
EPS Next Y6.14%
EPS Next 2Y7.86%
EPS Next 3Y8.6%
EPS Next 5Y8.61%
Revenue Next Year5.35%
Revenue Next 2Y4.92%
Revenue Next 3Y5.05%
Revenue Next 5Y5.36%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.84, which indicates a rather expensive current valuation of HON.
Compared to the rest of the industry, the Price/Earnings ratio of HON indicates a somewhat cheap valuation: HON is cheaper than 71.43% of the companies listed in the same industry.
HON's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.63.
Based on the Price/Forward Earnings ratio of 18.69, the valuation of HON can be described as rather expensive.
HON's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. HON is cheaper than 71.43% of the companies in the same industry.
HON is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.85, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.84 | ||
| Fwd PE | 18.69 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.33 | ||
| EV/EBITDA | 15.04 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HON does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of HON may justify a higher PE ratio.
PEG (NY)3.23
PEG (5Y)5.35
EPS Next 2Y7.86%
EPS Next 3Y8.6%
5. Dividend
5.1 Amount
HON has a Yearly Dividend Yield of 2.30%. Purely for dividend investing, there may be better candidates out there.
HON's Dividend Yield is rather good when compared to the industry average which is at 6.09. HON pays more dividend than 85.71% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.51, HON has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
5.2 History
The dividend of HON has a limited annual growth rate of 5.64%.
HON has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of HON decreased in the last 3 years.
Dividend Growth(5Y)5.64%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
50.87% of the earnings are spent on dividend by HON. This is a bit on the high side, but may be sustainable.
The dividend of HON is growing, but earnings are growing more, so the dividend growth is sustainable.
DP50.87%
EPS Next 2Y7.86%
EPS Next 3Y8.6%
194.23
-2.37 (-1.21%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryIndustrial Conglomerates
Earnings (Last)
Earnings (Next)
Inst Owners85.01%
Inst Owner Change0.08%
Ins Owners0.04%
Ins Owner Change0%
Market Cap124.94B
Analysts73.55
Price Target243.14 (25.18%)
Short Float %1.27%
Short Ratio1.93
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
Yearly Dividend4.46
Dividend Growth(5Y)5.64%
DP50.87%
Div Incr Years2
Div Non Decr Years2
Ex-Date
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)-0.47%
PT rev (3m)-3.54%
EPS NQ rev (1m)0.25%
EPS NQ rev (3m)-11%
EPS NY rev (1m)-0.6%
EPS NY rev (3m)-6.64%
Revenue NQ rev (1m)-0.04%
Revenue NQ rev (3m)-3.11%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)-2.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.84 | ||
| Fwd PE | 18.69 | ||
| P/S | 3.25 | ||
| P/FCF | 25.33 | ||
| P/OCF | 20.49 | ||
| P/B | 6.71 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.04 |
EPS(TTM)9.79
EY5.04%
EPS(NY)10.39
Fwd EY5.35%
FCF(TTM)7.67
FCFY3.95%
OCF(TTM)9.48
OCFY4.88%
SpS59.85
BVpS28.94
TBVpS-15.33
PEG (NY)3.23
PEG (5Y)5.35
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.59% | ||
| ROE | 30.64% | ||
| ROCE | 15.03% | ||
| ROIC | 11.06% | ||
| ROICexc | 13.62% | ||
| ROICexgc | 34.27% | ||
| OM | 21.05% | ||
| PM (TTM) | 14.82% | ||
| GM | 38.09% | ||
| FCFM | 12.81% |
ROA(3y)8.25%
ROA(5y)8.15%
ROE(3y)32.02%
ROE(5y)30.63%
ROIC(3y)12.23%
ROIC(5y)11.94%
ROICexc(3y)15.24%
ROICexc(5y)15.49%
ROICexgc(3y)37.17%
ROICexgc(5y)37.38%
ROCE(3y)16.37%
ROCE(5y)16.08%
ROICexcg growth 3Y-3.6%
ROICexcg growth 5Y-3.76%
ROICexc growth 3Y-5.53%
ROICexc growth 5Y-5.14%
OM growth 3Y-1.26%
OM growth 5Y0.55%
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 | 1.6 | ||
| Debt/FCF | 6.3 | ||
| Debt/EBITDA | 3.15 | ||
| Cap/Depr | 87.26% | ||
| Cap/Sales | 3.02% | ||
| Interest Coverage | 9.33 | ||
| Cash Conversion | 64.59% | ||
| Profit Quality | 86.47% | ||
| Current Ratio | 1.31 | ||
| Quick Ratio | 1.01 | ||
| Altman-Z | 3.26 |
F-Score6
WACC7.9%
ROIC/WACC1.4
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 Y6.14%
EPS Next 2Y7.86%
EPS Next 3Y8.6%
EPS Next 5Y8.61%
Revenue 1Y (TTM)5.01%
Revenue growth 3Y3.83%
Revenue growth 5Y0.96%
Sales Q2Q%6.86%
Revenue Next Year5.35%
Revenue Next 2Y4.92%
Revenue Next 3Y5.05%
Revenue Next 5Y5.36%
EBIT growth 1Y7.85%
EBIT growth 3Y2.52%
EBIT growth 5Y1.51%
EBIT Next Year20.49%
EBIT Next 3Y10.96%
EBIT Next 5Y10.3%
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%