Honeywell International Inc. Fundamental Analysis (NASDAQ: HON)
Honeywell International Inc. (NASDAQ: HON) shows strong financial fundamentals with a PE ratio of 8.40, profit margin of 22.73%, and ROE of 41.71%. The company generates $36.1B in annual revenue with moderate year-over-year growth of 7.85%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 70.4/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze HON's fundamental strength across five key dimensions:
Efficiency Score
ExcellentHON demonstrates superior asset utilization.
Valuation Score
ExcellentHON trades at attractive valuation levels.
Growth Score
ModerateHON shows steady but slowing expansion.
Financial Health Score
ModerateHON shows balanced financial health with some risks.
Profitability Score
ExcellentHON achieves industry-leading margins.
Key Financial Metrics
Is HON Expensive or Cheap?
P/E Ratio
HON trades at 8.40 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, HON's PEG of 0.18 indicates potential undervaluation.
Price to Book
The market values Honeywell International Inc. at 2.72 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 3.46 times EBITDA. This is generally considered low.
How Well Does HON Make Money?
Net Profit Margin
For every $100 in sales, Honeywell International Inc. keeps $22.73 as profit after all expenses.
Operating Margin
Core operations generate 14.09 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $41.71 in profit for every $100 of shareholder equity.
ROA
Honeywell International Inc. generates $10.62 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Honeywell International Inc. produces operating cash flow of $5.08B, showing steady but balanced cash generation.
Free Cash Flow
Honeywell International Inc. generates strong free cash flow of $4.12B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $12.99 in free cash annually.
FCF Yield
HON converts 6.01% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.40
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.18
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.72
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.90
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.35
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.21
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.42
vs 25 benchmark
ROA
Return on assets percentage
0.11
vs 25 benchmark
ROCE
Return on capital employed
0.09
vs 25 benchmark
How HON Stacks Against Its Sector Peers
| Metric | HON Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.40 | 29.88 | Better (Cheaper) |
| ROE | 41.71% | 1106.00% | Weak |
| Net Margin | 22.73% | -23408.00% (disorted) | Strong |
| Debt/Equity | 1.35 | 0.94 | Weak (High Leverage) |
| Current Ratio | 1.21 | 21.64 | Neutral |
| ROA | 10.62% | -1320888.00% (disorted) | Strong |
HON outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Honeywell International Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
26.41%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
9.03%
Industry Style: Cyclical, Value, Infrastructure
GrowingFCF CAGR
13.22%
Industry Style: Cyclical, Value, Infrastructure
High Growth