Honeywell International, Inc.HON

Morningstar Rating

Stock Research and Analysis

by Daniel Holland

A renewed focus on efficiency and stronger operating principles have helped Honeywell International improve profitability. We think this narrow-moat company is well positioned to take advantage of growth in its end markets and continue its recent success. Read more

Bulls Say

The acquisition of UOP, a supplier of catalysts and chemicals to the petroleum and natural gas industries, has helped boost the margins of the specialty chemical unit to double digits.

The aviation business has announced recent wins, which include supplying major mechanical systems for the Airbus A350.

Honeywell's leading market position in aerospace control and safety systems should allow the company to benefit from a long-term trend in strong demand from the commercial aircraft industry.

Consistent performance from specialty materials has helped bolster margins through the recovery. Read more

Bears Say

Recent acquisitions have left Honeywell with a negative net tangible book value and goodwill that makes up more than one fourth of the balance sheet.

Whenever significant capital flows into the company through divestiture or special one-time items, Honeywell prefers to retain the windfall for internal restructuring rather than simply returning it to shareholders.

The transportation system segment has hit a rough patch, with margins and growth deteriorating as a result of the weak U.S. economy. Read more

Management

CEO Dave Cote took over in 2002 and reinvigorated Honeywell's culture. Cote has implemented measures to more closely tie employee appraisals and incentive awards to productivity contributions. Before joining Honeywell, Cote was CEO of TRW TRW; before Read more

Profile

Honeywell International is a diversified manufacturer that operates four major business segments: aerospace; automation products for process controls, sensing instruments, Read more