HONEYWELL INTERNATIONAL INC (HON) Stock Fundamental Analysis
NASDAQ:HON - Nasdaq - US4385161066 - Common Stock - Currency: USD
HON gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 6 industry peers in the Industrial Conglomerates industry. HON has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. HON has a decent growth rate and is not valued too expensively. These ratings would make HON suitable 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.
In the past 5 years HON has always 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 83.33% of the companies in the same industry.
HON has a better Return On Equity (32.59%) than 83.33% of its industry peers.
With an excellent Return On Invested Capital value of 11.09%, HON belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HON is above the industry average of 7.97%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.57% | ||
| ROE | 32.59% | ||
| ROIC | 11.09% |
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 Profit Margin of 14.51%. This is amongst the best in the industry. HON outperforms 83.33% of its industry peers.
HON's Profit Margin has declined in the last couple of years.
HON has a better Operating Margin (20.98%) than 100.00% of its industry peers.
HON's Operating Margin has been stable in the last couple of years.
HON's Gross Margin of 38.06% is amongst the best of the industry. HON outperforms 83.33% of its industry peers.
In the last couple of years the Gross Margin of HON has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.98% | ||
| PM (TTM) | 14.51% | ||
| GM | 38.06% |
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.
Compared to 1 year ago, HON has less shares outstanding
Compared to 5 years ago, HON has less shares outstanding
The debt/assets ratio for HON is higher compared to a year ago.
2.2 Solvency
HON has an Altman-Z score of 3.51. This indicates that HON is financially healthy and has little risk of bankruptcy at the moment.
HON's Altman-Z score of 3.51 is amongst the best of the industry. HON outperforms 83.33% of its industry peers.
HON has a debt to FCF ratio of 6.48. This is a slightly negative value and a sign of low solvency as HON would need 6.48 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.48, HON belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
A Debt/Equity ratio of 1.80 is on the high side and indicates that HON has dependencies on debt financing.
HON has a better Debt to Equity ratio (1.80) than 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.8 | ||
| Debt/FCF | 6.48 | ||
| Altman-Z | 3.51 |
ROIC/WACC1.36
WACC8.14%
2.3 Liquidity
A Current Ratio of 1.25 indicates that HON should not have too much problems paying its short term obligations.
HON has a Current ratio (1.25) which is in line with its industry peers.
HON has a Quick Ratio of 1.25. This is a bad value and indicates that HON is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.95, HON is in line with its industry, outperforming 50.00% of the companies in the same 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 | 1.25 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
HON shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.49%.
HON shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.71% yearly.
HON shows a small growth in Revenue. In the last year, the Revenue has grown by 6.27%.
HON shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.96% yearly.
EPS 1Y (TTM)7.49%
EPS 3Y6.74%
EPS 5Y3.71%
EPS Q2Q%11.56%
Revenue 1Y (TTM)6.27%
Revenue growth 3Y3.83%
Revenue growth 5Y0.96%
Sales Q2Q%7.87%
3.2 Future
The Earnings Per Share is expected to grow by 8.61% on average over the next years. This is quite good.
Based on estimates for the next years, HON will show a small growth in Revenue. The Revenue will grow by 4.75% on average per year.
EPS Next Y7.3%
EPS Next 2Y8.11%
EPS Next 3Y8.59%
EPS Next 5Y8.61%
Revenue Next Year5.29%
Revenue Next 2Y4.84%
Revenue Next 3Y5.01%
Revenue Next 5Y4.75%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
HON is valuated rather expensively with a Price/Earnings ratio of 23.48.
HON's Price/Earnings ratio is rather cheap when compared to the industry. HON is cheaper than 83.33% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.30. HON is around the same levels.
A Price/Forward Earnings ratio of 20.62 indicates a rather expensive valuation of HON.
Based on the Price/Forward Earnings ratio, HON is valued a bit cheaper than the industry average as 66.67% 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 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.48 | ||
| Fwd PE | 20.62 |
4.2 Price Multiples
HON's Enterprise Value to EBITDA is on the same level as the industry average.
66.67% of the companies in the same industry are more expensive than HON, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.94 | ||
| EV/EBITDA | 17.44 |
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)3.22
PEG (5Y)6.33
EPS Next 2Y8.11%
EPS Next 3Y8.59%
5. Dividend
5.1 Amount
HON has a Yearly Dividend Yield of 1.91%.
HON's Dividend Yield is rather good when compared to the industry average which is at 5.68. HON pays more dividend than 83.33% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, HON has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
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.
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
HON pays out 51.50% 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.
DP51.5%
EPS Next 2Y8.11%
EPS Next 3Y8.59%
235.93
-0.84 (-0.35%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryIndustrial Conglomerates
Earnings (Last)
Earnings (Next)
Inst Owners82.8%
Inst Owner Change0%
Ins Owners0.04%
Ins Owner Change0%
Market Cap151.63B
Analysts75
Price Target247.05 (4.71%)
Short Float %0.99%
Short Ratio1.69
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
Yearly Dividend4.46
Dividend Growth(5Y)5.64%
DP51.5%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.84%
Min EPS beat(2)5.37%
Max EPS beat(2)12.31%
EPS beat(4)4
Avg EPS beat(4)5.46%
Min EPS beat(4)2.07%
Max EPS beat(4)12.31%
EPS beat(8)7
Avg EPS beat(8)3.07%
EPS beat(12)10
Avg EPS beat(12)3.01%
EPS beat(16)13
Avg EPS beat(16)2.57%
Revenue beat(2)2
Avg Revenue beat(2)1.49%
Min Revenue beat(2)1.37%
Max Revenue beat(2)1.6%
Revenue beat(4)3
Avg Revenue beat(4)0.25%
Min Revenue beat(4)-2.72%
Max Revenue beat(4)1.6%
Revenue beat(8)3
Avg Revenue beat(8)-0.65%
Revenue beat(12)5
Avg Revenue beat(12)-0.25%
Revenue beat(16)7
Avg Revenue beat(16)-0.43%
PT rev (1m)1.32%
PT rev (3m)1.61%
EPS NQ rev (1m)0.42%
EPS NQ rev (3m)3.4%
EPS NY rev (1m)0.16%
EPS NY rev (3m)0.59%
Revenue NQ rev (1m)0.39%
Revenue NQ rev (3m)-1.34%
Revenue NY rev (1m)0.25%
Revenue NY rev (3m)-0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.48 | ||
| Fwd PE | 20.62 | ||
| P/S | 3.87 | ||
| P/FCF | 29.94 | ||
| P/OCF | 24.28 | ||
| P/B | 8.68 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.44 |
EPS(TTM)10.05
EY4.26%
EPS(NY)11.44
Fwd EY4.85%
FCF(TTM)7.88
FCFY3.34%
OCF(TTM)9.72
OCFY4.12%
SpS61.02
BVpS27.17
TBVpS-17.26
PEG (NY)3.22
PEG (5Y)6.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.57% | ||
| ROE | 32.59% | ||
| ROCE | 15.48% | ||
| ROIC | 11.09% | ||
| ROICexc | 13.38% | ||
| ROICexgc | 32.21% | ||
| OM | 20.98% | ||
| PM (TTM) | 14.51% | ||
| GM | 38.06% | ||
| FCFM | 12.91% |
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-Score5
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.8 | ||
| Debt/FCF | 6.48 | ||
| Debt/EBITDA | 3.27 | ||
| Cap/Depr | 83.42% | ||
| Cap/Sales | 3.01% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 64.76% | ||
| Profit Quality | 88.98% | ||
| Current Ratio | 1.25 | ||
| Quick Ratio | 0.95 | ||
| Altman-Z | 3.51 |
F-Score5
WACC8.14%
ROIC/WACC1.36
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)7.49%
EPS 3Y6.74%
EPS 5Y3.71%
EPS Q2Q%11.56%
EPS Next Y7.3%
EPS Next 2Y8.11%
EPS Next 3Y8.59%
EPS Next 5Y8.61%
Revenue 1Y (TTM)6.27%
Revenue growth 3Y3.83%
Revenue growth 5Y0.96%
Sales Q2Q%7.87%
Revenue Next Year5.29%
Revenue Next 2Y4.84%
Revenue Next 3Y5.01%
Revenue Next 5Y4.75%
EBIT growth 1Y7.01%
EBIT growth 3Y2.52%
EBIT growth 5Y1.51%
EBIT Next Year20.19%
EBIT Next 3Y11.07%
EBIT Next 5Y10.3%
FCF growth 1Y37.68%
FCF growth 3Y-1.38%
FCF growth 5Y-4.03%
OCF growth 1Y40.23%
OCF growth 3Y0.32%
OCF growth 5Y-2.44%