HONEYWELL INTERNATIONAL INC (HON) Stock Fundamental Analysis
NASDAQ:HON - US4385161066 - Common Stock
222.83 USD
+5.41 (+2.49%)
222.88 USD
+0.05 (+0.02%)
Overall HON gets a fundamental rating of 6 out of 10. We evaluated HON against 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 is not valued too expensively and it also shows a decent growth rate. These ratings could make HON a good candidate 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.
HON had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of HON (7.29%) is better than 83.33% of its industry peers.
Looking at the Return On Equity, with a value of 35.52%, HON belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
HON's Return On Invested Capital of 10.45% is amongst the best of the industry. HON outperforms 83.33% of its industry peers.
HON had an Average Return On Invested Capital over the past 3 years of 12.23%. This 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
Looking at the Profit Margin, with a value of 14.30%, HON belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
In the last couple of years the Profit Margin of HON has declined.
HON has a better Operating Margin (20.76%) 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 Gross Margin of 38.08%. This is amongst the best in the industry. HON outperforms 83.33% of its industry peers.
HON's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), HON is creating some value.
The number of shares outstanding for HON has been reduced compared to 1 year ago.
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 3.25. This indicates that HON is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of HON (3.25) is better than 83.33% 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.
With an excellent Debt to FCF ratio value of 7.35, HON belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
HON has a Debt/Equity ratio of 2.26. This is a high value indicating a heavy dependency on external financing.
HON has a Debt to Equity ratio of 2.26. This is amongst the best in the industry. HON outperforms 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.26 | ||
| Debt/FCF | 7.35 | ||
| Altman-Z | 3.25 |
ROIC/WACC1.32
WACC7.94%
2.3 Liquidity
A Current Ratio of 1.29 indicates that HON should not have too much problems paying its short term obligations.
HON has a Current ratio (1.29) which is comparable to the rest of the industry.
HON has a Quick Ratio of 1.29. 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 has a Quick ratio (0.97) which is in line with 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 | 1.29 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.28% over the past year.
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 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
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 Y9.07%
EPS Next 2Y8.69%
EPS Next 3Y8.78%
EPS Next 5Y9.36%
Revenue Next Year6.94%
Revenue Next 2Y6%
Revenue Next 3Y5.65%
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
The Price/Earnings ratio is 21.61, which indicates a rather expensive current valuation of HON.
Compared to the rest of the industry, the Price/Earnings ratio of HON indicates a rather cheap valuation: HON is cheaper than 83.33% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.24. HON is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 19.27 indicates a rather expensive valuation of HON.
HON's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.81, HON is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.61 | ||
| Fwd PE | 19.27 |
4.2 Price Multiples
HON's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, HON is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.48 | ||
| EV/EBITDA | 16.37 |
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)2.38
PEG (5Y)5.83
EPS Next 2Y8.69%
EPS Next 3Y8.78%
5. Dividend
5.1 Amount
HON has a Yearly Dividend Yield of 2.08%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.05, HON pays a better dividend. On top of this HON pays more dividend than 83.33% of the companies listed in the same industry.
HON's Dividend Yield is comparable with the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.08% |
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
51.34% of the earnings are spent on dividend by HON. 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.
DP51.34%
EPS Next 2Y8.69%
EPS Next 3Y8.78%
222.83
+5.41 (+2.49%)
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 Cap141.47B
Analysts75
Price Target258.07 (15.81%)
Short Float %1.11%
Short Ratio2.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.08% |
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)1.4%
PT rev (3m)7.36%
EPS NQ rev (1m)0.92%
EPS NQ rev (3m)-3.13%
EPS NY rev (1m)1.65%
EPS NY rev (3m)1.82%
Revenue NQ rev (1m)0.85%
Revenue NQ rev (3m)0.5%
Revenue NY rev (1m)1.57%
Revenue NY rev (3m)1.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.61 | ||
| Fwd PE | 19.27 | ||
| P/S | 3.54 | ||
| P/FCF | 28.48 | ||
| P/OCF | 22.84 | ||
| P/B | 8.79 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.37 |
EPS(TTM)10.31
EY4.63%
EPS(NY)11.56
Fwd EY5.19%
FCF(TTM)7.82
FCFY3.51%
OCF(TTM)9.76
OCFY4.38%
SpS62.99
BVpS25.35
TBVpS-23.73
PEG (NY)2.38
PEG (5Y)5.83
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 | 3.25 |
F-Score6
WACC7.94%
ROIC/WACC1.32
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 Year6.94%
Revenue Next 2Y6%
Revenue Next 3Y5.65%
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%