221.46 USD
-1.08 (-0.49%)
220.51 USD
-0.95 (-0.43%)
We assign a fundamental rating of 6 out of 10 to HON. HON was compared to 7 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.
- In the past year HON had a positive cash flow from operations.
- Each year in the past 5 years HON has been profitable.
- In the past 5 years HON always reported a positive cash flow from operatings.
1.2 Ratios
- With an excellent Return On Assets value of 7.57%, HON belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
- HON's Return On Equity of 36.52% is amongst the best of the industry. HON outperforms 85.71% of its industry peers.
- With an excellent Return On Invested Capital value of 9.86%, HON belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
- HON had an Average Return On Invested Capital over the past 3 years of 12.23%. This is above the industry average of 7.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.57% | ||
| ROE | 36.52% | ||
| ROIC | 9.86% |
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
- With an excellent Profit Margin value of 15.07%, HON belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- HON's Profit Margin has declined in the last couple of years.
- HON has a better Operating Margin (19.89%) 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.
- HON has a better Gross Margin (36.94%) than 85.71% of its industry peers.
- HON's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.89% | ||
| PM (TTM) | 15.07% | ||
| GM | 36.94% |
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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), HON is creating some value.
- HON has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, HON has less shares outstanding
- HON has a worse debt/assets ratio than last year.
2.2 Solvency
- HON has an Altman-Z score of 3.20. This indicates that HON is financially healthy and has little risk of bankruptcy at the moment.
- HON has a better Altman-Z score (3.20) than 100.00% of its industry peers.
- The Debt to FCF ratio of HON is 6.01, which is on the high side as it means it would take HON, 6.01 years of fcf income to pay off all of its debts.
- HON has a Debt to FCF ratio of 6.01. This is amongst the best in the industry. HON outperforms 100.00% of its industry peers.
- HON has a Debt/Equity ratio of 2.20. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 2.20, HON is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.2 | ||
| Debt/FCF | 6.01 | ||
| Altman-Z | 3.2 |
ROIC/WACC1.24
WACC7.92%
2.3 Liquidity
- HON has a Current Ratio of 1.36. This is a normal value and indicates that HON is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.36, HON is in line with its industry, outperforming 57.14% of the companies in the same industry.
- A Quick Ratio of 1.04 indicates that HON should not have too much problems paying its short term obligations.
- HON has a Quick ratio of 1.04. This is comparable to the rest of the industry: HON outperforms 57.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
- HON shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.35%.
- The Earnings Per Share has been growing slightly by 3.71% on average over the past years.
- Looking at the last year, HON shows a small growth in Revenue. The Revenue has grown by 7.45% in the last year.
- HON shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.96% yearly.
EPS 1Y (TTM)6.35%
EPS 3Y6.74%
EPS 5Y3.71%
EPS Q2Q%9.3%
Revenue 1Y (TTM)7.45%
Revenue growth 3Y3.83%
Revenue growth 5Y0.96%
Sales Q2Q%6.99%
3.2 Future
- The Earnings Per Share is expected to grow by 9.36% on average over the next years. This is quite good.
- HON is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.94% yearly.
EPS Next Y9.85%
EPS Next 2Y4.61%
EPS Next 3Y6.29%
EPS Next 5Y9.36%
Revenue Next Year4.78%
Revenue Next 2Y2.13%
Revenue Next 3Y3.22%
Revenue Next 5Y4.94%
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
- A Price/Earnings ratio of 20.99 indicates a rather expensive valuation of HON.
- HON's Price/Earnings ratio is rather cheap when compared to the industry. HON is cheaper than 85.71% of the companies in the same industry.
- When comparing the Price/Earnings ratio of HON to the average of the S&P500 Index (27.21), we can say HON is valued slightly cheaper.
- Based on the Price/Forward Earnings ratio of 20.67, the valuation of HON can be described as rather expensive.
- HON's Price/Forward Earnings ratio is in line with the industry average.
- HON is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.99 | ||
| Fwd PE | 20.67 |
4.2 Price Multiples
- 71.43% of the companies in the same industry are more expensive than HON, based on the Enterprise Value to EBITDA ratio.
- HON's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HON is cheaper than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.81 | ||
| EV/EBITDA | 16.35 |
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.
- HON has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.13
PEG (5Y)5.66
EPS Next 2Y4.61%
EPS Next 3Y6.29%
5. Dividend
5.1 Amount
- HON has a Yearly Dividend Yield of 2.21%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 4.52, HON pays a better dividend. On top of this HON pays more dividend than 85.71% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, HON pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.21% |
5.2 History
- The dividend of HON has a limited annual growth rate of 5.64%.
- HON has been paying a dividend for at least 10 years, so it has a reliable track record.
- HON has decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.64%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- HON pays out 48.21% of its income as dividend. 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.
DP48.21%
EPS Next 2Y4.61%
EPS Next 3Y6.29%
HONEYWELL INTERNATIONAL INC / HON FAQ
What is the fundamental rating for HON stock?
ChartMill assigns a fundamental rating of 6 / 10 to HON.
What is the valuation status for HON stock?
ChartMill assigns a valuation rating of 5 / 10 to HONEYWELL INTERNATIONAL INC (HON). This can be considered as Fairly Valued.
Can you provide the profitability details for HONEYWELL INTERNATIONAL INC?
HONEYWELL INTERNATIONAL INC (HON) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for HON stock?
The Price/Earnings (PE) ratio for HONEYWELL INTERNATIONAL INC (HON) is 20.99 and the Price/Book (PB) ratio is 8.38.
Is the dividend of HONEYWELL INTERNATIONAL INC sustainable?
The dividend rating of HONEYWELL INTERNATIONAL INC (HON) is 6 / 10 and the dividend payout ratio is 48.21%.