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Why Honeywell Stock Is Worth Adding to Your Portfolio

Real Money's Stephen "Sarge" Guilfoyle says Honeywell's recent dip offers investors a good buying opportunity.

Many companies reported positive earnings during the second quarter as several sectors rebounded when supply chain issues improved, reopenings occurred and pandemic issues decreased.

Honeywell’s  (HON) - Get Honeywell International Inc. (HON) Report second quarter was worth noting – beating expectations for earnings per share and revenue generated.

Honeywell’s stock has dipped recently, presenting a good buying opportunity for investors, Stephen "Sarge" Guilfoyle said in a recent Real Money column. The industrial company’s stock took a beating last year amid pandemic restrictions, but recovered. The stock has faced some volatility lately.

"HON's outstanding quarter shows they're hitting on all cylinders while increasing margin in the process, Guilfoyle writes. Read I'm Adding On to This Dip in Honeywell: Here's the Plan for more of his investing ideas and strategies.

Honeywell shares added 0.10% Tuesday to close at $232.65.

“I do think that I add on this dip, though obviously I should have added in mid-June,” Guilfoyle wrote.

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Guilfoyle says he's not in a rush and plans to increase his position in Honeywell over time.

“I do want to grow this position,” he wrote. “I will not add significantly as this position is a winner and I do not want to wreck my net basis.”

Honeywell’s aerospace and energy business performed well during the second quarter – sales in aerospace rose by 9% to $2.766 billion as Boeing's  (BA) - Get Boeing Company Report 737-MAX began flying again. Even its segment margin rose from 20.8% to 25.7%.

Another positive note is how well the performance materials and technologies unit delivered in the second quarter. Sales rose by 15% to $2.55 billion while the segment margin increased from 18.9% to 20.8%.

The company raised its outlook for the remainder of the year.

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“The worm has turned in the right direction for this firm, and for the various parts of the firm as well,” Guilfoyle wrote. “While we can not say that the stock has run into earnings, the stock has consistently gained all year (2021) long after running in late 2020.”