Honeywell International Inc (HON) stock analysis

P/E below its 5-year median

Honeywell International's P/E of 10.3 is below its own 5-year median of 12.6.

P/E below the industry

Honeywell International's P/E of 10.3 is below the Aircraft and Parts median of 27.6.

EV/EBITDA below its 5-year median

Honeywell International's EV/EBITDA of 6.6 is below its 5-year median of 10.4.

P/B above the industry

Honeywell International's price-to-book of 3.22 is above the Aircraft and Parts median of 2.88.

Trading below fair value

The share price of $227.64 is below our fair value estimate of $424.64.

Margin of safety over 20%

The price is 46.4% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 1.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 0.4% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 15.1% over the last twelve months, against a 5-year average of -0.2% a year.

Growing slower than the industry

Revenue grew 3.9% over the last twelve months; the Aircraft and Parts median is 16.9%.

Guidance lowered

Honeywell International lowered its full-year Sales outlook on Jul 23, 2026.

Gross margin slipping

Gross margin was 37.7% over the last twelve months, against 42.4% a year earlier.

Return on equity over 15%

Return on equity was 36.0% over the last twelve months and averaged 31.2% over five years.

Return on capital over 10%

Return on invested capital was 24.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Honeywell International's return on equity of 36.0% is above the Aircraft and Parts median of 9.1%.

Earnings shrank over 5 years

Net income shrank 0.2% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 21.0% over the last twelve months, against a 5-year average of 15.3%.

Net margin above the industry

Honeywell International's net margin of 21.0% is above the Aircraft and Parts median of 5.5%.

High debt

Debt is 74.0% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 128% five years ago to 74.0%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 11.7% of total debt; we look for at least 20%.

Interest coverage

Interest expense is not reported separately.

Short-term assets don't cover short-term debts

Current assets are 0.96 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.28; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Honeywell International paid dividends worth 1.9% of the share price over the last twelve months.

Yield below Treasuries

The 1.9% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Honeywell International yields 1.9%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 36.6% of net income.

Not covered by free cash flow

Dividends take 267% of free cash flow.