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 6 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 decent growth rate and is not valued too expensively. With these ratings, HON could be worth investigating further for quality investing!.
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.
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.
With an excellent Return On Equity value of 32.59%, HON belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
HON has a better Return On Invested Capital (11.09%) than 83.33% of its industry peers.
The Average Return On Invested Capital over the past 3 years 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
The Profit Margin of HON (14.51%) is better than 83.33% of its industry peers.
HON's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 20.98%, HON belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
HON's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 38.06%, HON belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
HON's Gross Margin has improved in the last couple of years.
| 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
HON has less shares outstanding than it did 5 years ago.
The debt/assets ratio for HON is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.41 indicates that HON is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 3.41, HON belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
The Debt to FCF ratio of HON is 6.48, which is on the high side as it means it would take HON, 6.48 years of fcf income to pay off all of its debts.
HON has a better Debt to FCF ratio (6.48) than 100.00% of its industry peers.
A Debt/Equity ratio of 1.80 is on the high side and indicates that HON has dependencies on debt financing.
HON's Debt to Equity ratio of 1.80 is amongst the best of the industry. HON outperforms 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.8 | ||
| Debt/FCF | 6.48 | ||
| Altman-Z | 3.41 |
ROIC/WACC1.15
WACC9.63%
2.3 Liquidity
HON has a Current Ratio of 1.25. This is a normal value and indicates that HON is financially healthy and should not expect problems in meeting its short term obligations.
HON's Current ratio of 1.25 is in line compared to the rest of the industry. HON outperforms 50.00% of 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.
HON's Quick ratio of 0.95 is in line compared to the rest of the industry. HON outperforms 50.00% of its industry peers.
The current and quick ratio evaluation for HON is rather negative, while it does have 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
The Earnings Per Share has been growing slightly by 7.49% 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 6.27% 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)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
HON is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.61% yearly.
The Revenue is expected to grow by 5.36% on average over the next years.
EPS Next Y7.13%
EPS Next 2Y7.91%
EPS Next 3Y8.47%
EPS Next 5Y8.61%
Revenue Next Year5.03%
Revenue Next 2Y4.63%
Revenue Next 3Y4.87%
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.
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
Based on the Price/Earnings ratio of 22.08, the valuation of HON can be described as rather expensive.
Based on the Price/Earnings ratio, HON is valued cheaper than 83.33% of the companies in the same industry.
When comparing the Price/Earnings ratio of HON to the average of the S&P500 Index (26.34), we can say HON is valued inline with the index average.
The Price/Forward Earnings ratio is 19.46, which indicates a rather expensive current valuation of HON.
66.67% of the companies in the same industry are more expensive than HON, based on the Price/Forward Earnings ratio.
HON is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.08 | ||
| Fwd PE | 19.46 |
4.2 Price Multiples
HON's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, HON is valued a bit cheaper than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.16 | ||
| EV/EBITDA | 16.51 |
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)3.1
PEG (5Y)5.95
EPS Next 2Y7.91%
EPS Next 3Y8.47%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.00%, HON has a reasonable but not impressive dividend return.
HON's Dividend Yield is a higher than the industry average which is at 6.18.
HON's Dividend Yield is comparable with the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
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
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 2Y7.91%
EPS Next 3Y8.47%
221.87
+0.08 (+0.04%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryIndustrial Conglomerates
Earnings (Last)
Earnings (Next)
Inst Owners82.8%
Inst Owner Change-2.89%
Ins Owners0.04%
Ins Owner Change0%
Market Cap142.59B
Analysts74.84
Price Target243.84 (9.9%)
Short Float %1.09%
Short Ratio1.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
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)1.44%
PT rev (3m)-0.19%
EPS NQ rev (1m)0.09%
EPS NQ rev (3m)2.73%
EPS NY rev (1m)0%
EPS NY rev (3m)0.32%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-1.7%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.08 | ||
| Fwd PE | 19.46 | ||
| P/S | 3.64 | ||
| P/FCF | 28.16 | ||
| P/OCF | 22.83 | ||
| P/B | 8.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.51 |
EPS(TTM)10.05
EY4.53%
EPS(NY)11.4
Fwd EY5.14%
FCF(TTM)7.88
FCFY3.55%
OCF(TTM)9.72
OCFY4.38%
SpS61.02
BVpS27.17
TBVpS-17.26
PEG (NY)3.1
PEG (5Y)5.95
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 | 3.41 |
F-Score5
WACC9.63%
ROIC/WACC1.15
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 Y7.13%
EPS Next 2Y7.91%
EPS Next 3Y8.47%
EPS Next 5Y8.61%
Revenue 1Y (TTM)6.27%
Revenue growth 3Y3.83%
Revenue growth 5Y0.96%
Sales Q2Q%7.87%
Revenue Next Year5.03%
Revenue Next 2Y4.63%
Revenue Next 3Y4.87%
Revenue Next 5Y5.36%
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%