Honeywell International Inc (NASDAQ: HON)

Sector: Industrials Industry: Conglomerates CIK: 0000773840
Market Cap 155.07 Bn
P/B 11.15
P/E 32.79
P/S 4.14
ROIC (Qtr) 8.11
Div Yield % 1.89
Rev 1y % (Qtr) 8.77
Total Debt (Qtr) 34.58 Bn
Debt/Equity (Qtr) 2.49
Add ratio to table...

About

Investment thesis

Bull case

  • Operating cash flow of 6.41B provides exceptional 149.02x coverage of minority interest expenses 43M, showing strong core operations.
  • Operating cash flow of 6.41B provides strong 32.69x coverage of stock compensation 196M, indicating sustainable incentive practices.
  • Robust free cash flow of 5.45B exceeds capital expenditure of 955M by 5.71x, indicating strong organic growth funding capability.
  • Retained earnings of 50.96B provide full 1.88x coverage of long-term debt 27.14B, indicating strong internal capital position.
  • Cash position of 12.49B provides exceptional 290.40x coverage of minority interest expenses 43M, indicating strong liquidity.

Bear case

  • Operating cash flow of 6.41B barely covers its investment activities of (2.71B), with a coverage ratio of -2.36, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (2.71B) provide weak support for R&D spending of 1.81B, which is -1.50x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 6.41B provides thin coverage of dividend payments of (2.98B) with a -2.15 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 12.49B provide limited coverage of acquisition spending of (1.05B), which is -11.85x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 6.41B barely covers operating expenses of (253M) with a -25.33 ratio, suggesting thin operational efficiency margins and limited flexibility.

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Conglomerates
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 HON Honeywell International Inc 155.07 Bn 32.79 4.14 34.58 Bn
2 MMM 3M Co 100.16 Bn 20.62 3.16 12.60 Bn
3 VMI Valmont Industries Inc 11.52 Bn 79.14 5.93 0.86 Bn
4 SEB Seaboard Corp /De/ 4.74 Bn 9.55 0.49 1.82 Bn
5 MDU Mdu Resources Group Inc 3.80 Bn 15.84 0.97 2.35 Bn
6 OTTR Otter Tail Corp 3.60 Bn 20.35 3.01 1.04 Bn
7 BBU Brookfield Business Partners L.P. 2.64 Bn -19.71 0.10 43.31 Bn
8 TTI Tetra Technologies Inc 1.44 Bn 11.77 2.33 0.21 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.43 1.07
EV to Cash from Ops. EV/CFO 27.96 26.27
EV to Debt EV to Debt 5.18 3.17
EV to EBIT EV/EBIT 25.30 28.37
EV to EBITDA EV/EBITDA 21.83 2.98
EV to Free Cash Flow [EV/FCF] EV/FCF 32.86 24.12
EV to Market Cap EV to Market Cap 1.16 2.07
EV to Revenue EV/Rev 4.79 3.10
Price to Book Value [P/B] P/B 11.15 0.16
Price to Earnings [P/E] P/E 32.79 -51.36
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.59 2.51
Dividend Payout Ratio % Div Payout % (Qtr) 61.90 16.94
Dividend per Basic Share Div per Share (Qtr) 4.58 1.03
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 53.32 -1.97
Interest Coverage Int. cover (Qtr) 5.27 4.08
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -9.64 -245.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 26.05 116.15
Dividend Growth (1y) % Div 1y % (Qtr) 4.81 -1.11
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -11.09 233.90
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -2.79 6.29
EBIT Growth (1y) % EBIT 1y % (Qtr) -11.51 58.90
EBT Growth (1y) % EBT 1y % (Qtr) -17.50 -70.32
EPS Growth (1y) % EPS 1y % (Qtr) -15.53 179.10
FCF Growth (1y) % FCF 1y % (Qtr) 4.34 22.76
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.53 19.56
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.51 0.64
Cash Payout Ratio Cash Payout (Qtr) 0.40 -0.01
Cash Ratio Cash Ratio (Qtr) 0.53 0.34
Current Ratio Curr Ratio (Qtr) 1.30 1.70
Debt to Equity Ratio Debt/Equity (Qtr) 2.49 -5.62
Interest Cover Ratio Int Coverage (Qtr) 5.27 4.08
Times Interest Earned Times Interest Earned (Qtr) 5.27 4.08
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 22.60 -14.03
EBIT Margin % EBIT Margin % (Qtr) 18.91 -16.67
EBT Margin % EBT Margin % (Qtr) 15.32 -20.17
Gross Margin % Gross Margin % (Qtr) 36.90 21.90
Net Profit Margin % Net Margin % (Qtr) 12.60 -21.67