HONEYWELL INTERNATIONAL INC (HON) Stock Fundamental Analysis
USA - NASDAQ:HON - US4385161066 - Common Stock
210.95 USD
-0.79 (-0.37%)
211.6 USD
+0.65 (+0.31%)
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 on profitability, but there are some minor concerns on its financial health. HON is not valued too expensively and it also shows a decent growth rate.
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.
HON had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.29%, HON belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
Looking at the Return On Equity, with a value of 35.52%, HON belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
With an excellent Return On Invested Capital value of 10.45%, HON belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HON is above the industry average of 8.05%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.29% | ||
| ROE | 35.52% | ||
| ROIC | 10.45% |
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 14.30%. This is amongst the best in the industry. HON outperforms 85.71% of its industry peers.
In the last couple of years the Profit Margin of HON has declined.
Looking at the Operating Margin, with a value of 20.76%, HON belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of HON has remained more or less at the same level.
With an excellent Gross Margin value of 38.08%, HON belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
In the last couple of years the Gross Margin of HON has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.76% | ||
| PM (TTM) | 14.3% | ||
| GM | 38.08% |
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.
HON has less shares outstanding than it did 1 year ago.
The number of shares outstanding for HON has been reduced compared to 5 years ago.
HON has a worse debt/assets ratio than last year.
2.2 Solvency
HON has an Altman-Z score of 3.18. This indicates that HON is financially healthy and has little risk of bankruptcy at the moment.
HON's Altman-Z score of 3.18 is amongst the best of the industry. HON outperforms 85.71% of its industry peers.
HON has a debt to FCF ratio of 7.35. This is a slightly negative value and a sign of low solvency as HON would need 7.35 years to pay back of all of its debts.
HON has a Debt to FCF ratio of 7.35. This is amongst the best in the industry. HON outperforms 100.00% of its industry peers.
A Debt/Equity ratio of 2.26 is on the high side and indicates that HON has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.26, 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 | 2.26 | ||
| Debt/FCF | 7.35 | ||
| Altman-Z | 3.18 |
ROIC/WACC1.35
WACC7.72%
2.3 Liquidity
HON has a Current Ratio of 1.29. 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 Current ratio (1.29) which is comparable to the rest of the industry.
A Quick Ratio of 0.97 indicates that HON may have some problems paying its short term obligations.
HON has a Quick ratio (0.97) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.29 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.28% over the past year.
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.
Looking at the last year, HON shows a small growth in Revenue. The Revenue has grown by 7.11% in the last year.
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)7.28%
EPS 3Y6.74%
EPS 5Y3.71%
EPS Q2Q%10.44%
Revenue 1Y (TTM)7.11%
Revenue growth 3Y3.83%
Revenue growth 5Y0.96%
Sales Q2Q%8.09%
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 9.36% yearly.
The Revenue is expected to grow by 4.94% on average over the next years.
EPS Next Y9.07%
EPS Next 2Y8.69%
EPS Next 3Y8.78%
EPS Next 5Y9.36%
Revenue Next Year6.98%
Revenue Next 2Y5.81%
Revenue Next 3Y5.47%
Revenue Next 5Y4.94%
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
A Price/Earnings ratio of 20.46 indicates a rather expensive valuation of HON.
Based on the Price/Earnings ratio, HON is valued cheaply inside the industry as 85.71% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.20, HON is valued a bit cheaper.
The Price/Forward Earnings ratio is 18.24, which indicates a rather expensive current valuation of HON.
The rest of the industry has a similar Price/Forward Earnings ratio as HON.
The average S&P500 Price/Forward Earnings ratio is at 22.71. HON is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.46 | ||
| Fwd PE | 18.24 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as HON.
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 | 26.96 | ||
| EV/EBITDA | 15.61 |
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)2.26
PEG (5Y)5.52
EPS Next 2Y8.69%
EPS Next 3Y8.78%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.10%, HON has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 6.00, HON pays a better dividend. On top of this HON pays more dividend than 85.71% of the companies listed in the same industry.
HON's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
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.
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 51.34% 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.
DP51.34%
EPS Next 2Y8.69%
EPS Next 3Y8.78%
210.95
-0.79 (-0.37%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryIndustrial Conglomerates
Earnings (Last)
Earnings (Next)
Inst Owners83.71%
Inst Owner Change-3.71%
Ins Owners0.04%
Ins Owner Change0%
Market Cap133.93B
Analysts75
Price Target259.28 (22.91%)
Short Float %1.21%
Short Ratio2.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
Yearly Dividend4.46
Dividend Growth(5Y)5.64%
DP51.34%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.39%
Min EPS beat(2)2.48%
Max EPS beat(2)12.31%
EPS beat(4)4
Avg EPS beat(4)5.56%
Min EPS beat(4)2.07%
Max EPS beat(4)12.31%
EPS beat(8)7
Avg EPS beat(8)3.37%
EPS beat(12)10
Avg EPS beat(12)3.01%
EPS beat(16)13
Avg EPS beat(16)2.52%
Revenue beat(2)2
Avg Revenue beat(2)1.58%
Min Revenue beat(2)1.37%
Max Revenue beat(2)1.79%
Revenue beat(4)3
Avg Revenue beat(4)0.51%
Min Revenue beat(4)-2.72%
Max Revenue beat(4)1.79%
Revenue beat(8)4
Avg Revenue beat(8)-0.27%
Revenue beat(12)5
Avg Revenue beat(12)-0.29%
Revenue beat(16)7
Avg Revenue beat(16)-0.38%
PT rev (1m)0.47%
PT rev (3m)6.33%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.1%
EPS NY rev (1m)1.65%
EPS NY rev (3m)1.82%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.51%
Revenue NY rev (1m)0.59%
Revenue NY rev (3m)1.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.46 | ||
| Fwd PE | 18.24 | ||
| P/S | 3.35 | ||
| P/FCF | 26.96 | ||
| P/OCF | 21.62 | ||
| P/B | 8.32 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.61 |
EPS(TTM)10.31
EY4.89%
EPS(NY)11.56
Fwd EY5.48%
FCF(TTM)7.82
FCFY3.71%
OCF(TTM)9.76
OCFY4.62%
SpS62.99
BVpS25.35
TBVpS-23.73
PEG (NY)2.26
PEG (5Y)5.52
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.29% | ||
| ROE | 35.52% | ||
| ROCE | 14.62% | ||
| ROIC | 10.45% | ||
| ROICexc | 12.58% | ||
| ROICexgc | 31.05% | ||
| OM | 20.76% | ||
| PM (TTM) | 14.3% | ||
| GM | 38.08% | ||
| FCFM | 12.42% |
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 | 2.26 | ||
| Debt/FCF | 7.35 | ||
| Debt/EBITDA | 3.71 | ||
| Cap/Depr | 81.08% | ||
| Cap/Sales | 3.07% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 63.11% | ||
| Profit Quality | 86.9% | ||
| Current Ratio | 1.29 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 3.18 |
F-Score6
WACC7.72%
ROIC/WACC1.35
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)7.28%
EPS 3Y6.74%
EPS 5Y3.71%
EPS Q2Q%10.44%
EPS Next Y9.07%
EPS Next 2Y8.69%
EPS Next 3Y8.78%
EPS Next 5Y9.36%
Revenue 1Y (TTM)7.11%
Revenue growth 3Y3.83%
Revenue growth 5Y0.96%
Sales Q2Q%8.09%
Revenue Next Year6.98%
Revenue Next 2Y5.81%
Revenue Next 3Y5.47%
Revenue Next 5Y4.94%
EBIT growth 1Y6.67%
EBIT growth 3Y2.52%
EBIT growth 5Y1.51%
EBIT Next Year22.69%
EBIT Next 3Y12.3%
EBIT Next 5Y10.87%
FCF growth 1Y19.02%
FCF growth 3Y-1.38%
FCF growth 5Y-4.03%
OCF growth 1Y23.26%
OCF growth 3Y0.32%
OCF growth 5Y-2.44%