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 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.
Each year in the past 5 years HON has been profitable.
Each year in the past 5 years HON had a positive operating cash flow.
1.2 Ratios
HON's Return On Assets of 7.57% is amongst the best of the industry. HON outperforms 83.33% of its industry peers.
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.
The Return On Invested Capital of HON (11.09%) is better 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 8.04%.
| 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
Looking at the Profit Margin, with a value of 14.51%, 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 (20.98%) 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's Gross Margin of 38.06% is amongst the best of 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 | 20.98% | ||
| 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.
Compared to 5 years ago, HON has less shares outstanding
HON has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.43 indicates that HON is not in any danger for bankruptcy at the moment.
HON has a Altman-Z score of 3.43. This is amongst the best in 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.
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 | 3.43 |
ROIC/WACC1.36
WACC8.13%
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 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.
HON has a Quick ratio (0.95) which is in line with its industry peers.
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
The Earnings Per Share has been growing slightly by 7.49% 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.
The Revenue has been growing slightly by 6.27% in the past year.
The Revenue has been growing slightly by 0.96% on average over the past years.
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%
Revenue Next 2Y4.57%
Revenue Next 3Y4.85%
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.
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 22.39, which indicates a rather expensive current valuation of HON.
Based on the Price/Earnings ratio, HON is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.60. HON is around the same levels.
A Price/Forward Earnings ratio of 19.74 indicates a rather expensive valuation of HON.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HON indicates a somewhat cheap valuation: HON is cheaper than 66.67% of the companies listed in the same industry.
HON is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.43, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.39 | ||
| Fwd PE | 19.74 |
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 a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.56 | ||
| EV/EBITDA | 16.71 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of HON may justify a higher PE ratio.
PEG (NY)3.14
PEG (5Y)6.04
EPS Next 2Y7.91%
EPS Next 3Y8.47%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.03%, HON has a reasonable but not impressive dividend return.
HON's Dividend Yield is rather good when compared to the industry average which is at 5.39. HON pays more dividend than 83.33% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, HON has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.03% |
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%
225.06
+0.12 (+0.05%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryIndustrial Conglomerates
Earnings (Last)
Earnings (Next)
Inst Owners85.01%
Inst Owner Change-2.93%
Ins Owners0.04%
Ins Owner Change0%
Market Cap144.64B
Analysts73.55
Price Target240.37 (6.8%)
Short Float %1.03%
Short Ratio1.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.03% |
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)-1.14%
PT rev (3m)-3.97%
EPS NQ rev (1m)2.88%
EPS NQ rev (3m)2.58%
EPS NY rev (1m)0.93%
EPS NY rev (3m)0.28%
Revenue NQ rev (1m)-1.74%
Revenue NQ rev (3m)-1.63%
Revenue NY rev (1m)-0.33%
Revenue NY rev (3m)-2.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.39 | ||
| Fwd PE | 19.74 | ||
| P/S | 3.69 | ||
| P/FCF | 28.56 | ||
| P/OCF | 23.16 | ||
| P/B | 8.28 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.71 |
EPS(TTM)10.05
EY4.47%
EPS(NY)11.4
Fwd EY5.07%
FCF(TTM)7.88
FCFY3.5%
OCF(TTM)9.72
OCFY4.32%
SpS61.02
BVpS27.17
TBVpS-17.26
PEG (NY)3.14
PEG (5Y)6.04
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 | 3.43 |
F-Score5
WACC8.13%
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 Y7.13%
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%
Revenue Next 2Y4.57%
Revenue Next 3Y4.85%
Revenue Next 5Y5.36%
EBIT growth 1Y7.01%
EBIT growth 3Y2.52%
EBIT growth 5Y1.51%
EBIT Next Year20.49%
EBIT Next 3Y10.96%
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%