HONEYWELL INTERNATIONAL INC (HON) Stock Fundamental Analysis
NASDAQ:HON - Nasdaq - US4385161066 - Common Stock - Currency: USD
Taking everything into account, HON scores 6 out of 10 in our fundamental rating. HON was compared to 6 industry peers in the Industrial Conglomerates industry. HON gets an excellent profitability rating and is at the same time showing great financial health properties. HON has a correct valuation and a medium growth rate. With these ratings, HON could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
HON had positive earnings in the past year.
HON had a positive operating cash flow in the past year.
In the past 5 years HON has always been profitable.
Each year in the past 5 years HON had a positive operating cash flow.
1.2 Ratios
HON has a Return On Assets of 7.57%. This is amongst the best in the industry. HON outperforms 83.33% of its industry peers.
HON has a Return On Equity of 32.59%. This is amongst the best in the industry. HON outperforms 83.33% of its industry peers.
HON's Return On Invested Capital of 11.09% is amongst the best of the industry. HON outperforms 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
HON's Profit Margin of 14.51% is amongst the best of 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 has a Gross Margin of 38.06%. This is amongst the best in 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so HON is still creating some value.
The number of shares outstanding for HON has been reduced compared to 1 year ago.
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.
The Altman-Z score of HON (3.41) is better than 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.
The Debt to FCF ratio of HON (6.48) is better than 100.00% of its industry peers.
HON has a Debt/Equity ratio of 1.80. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of HON (1.80) is better than 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.8 | ||
| Debt/FCF | 6.48 | ||
| Altman-Z | 3.41 |
ROIC/WACC1.14
WACC9.71%
2.3 Liquidity
A Current Ratio of 1.25 indicates that HON should not have too much problems paying its short term obligations.
The Current ratio of HON (1.25) is comparable to the rest of the industry.
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.
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
HON shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.49%.
Measured over the past 5 years, HON shows a small growth in Earnings Per Share. The EPS has been growing by 3.71% on average per year.
HON shows a small growth in Revenue. In the last year, the Revenue has grown by 6.27%.
Measured over the past years, HON shows a small growth in Revenue. The Revenue has been growing by 0.96% on average per year.
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
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.
Based on estimates for the next years, HON will show a small growth in Revenue. The Revenue will grow by 5.36% on average per year.
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
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
The Price/Earnings ratio is 22.08, which indicates a rather expensive current valuation of HON.
Based on the Price/Earnings ratio, HON is valued cheaper than 83.33% of the companies in the same industry.
HON's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.32.
HON is valuated rather expensively with a Price/Forward Earnings ratio of 19.46.
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 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 | 16.5 |
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)3.1
PEG (5Y)5.95
EPS Next 2Y7.91%
EPS Next 3Y8.47%
5. Dividend
5.1 Amount
HON has a Yearly Dividend Yield of 2.00%. Purely for dividend investing, there may be better candidates out there.
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 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 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 | 16.5 |
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
WACC9.71%
ROIC/WACC1.14
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%