Honeywell International Inc

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HON : NYSE : Industrial Goods
$117.41 | %
Today's Range: 0.0 - 0.0
Avg. Daily Volume: 3324500.0
01/23/17 - 4:00 PM ET

Financial Analysis


HONEYWELL INTERNATIONAL INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. HONEYWELL INTERNATIONAL INC has weak liquidity. Currently, the Quick Ratio is 0.83 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 8.05% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)9804.09611.0
EBITDA ($mil)2073.02107.0
EBIT ($mil)1813.01888.0
Net Income ($mil)1240.01264.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)6431.06563.0
Total Assets ($mil)53556.046625.0
Total Debt ($mil)15858.010567.0
Equity ($mil)19191.017760.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin34.5534.39
EBITDA Margin21.1421.92
Operating Margin18.4919.64
Sales Turnover0.730.83
Return on Assets9.279.71
Return on Equity25.8925.5
Debt Q3 FY16 Q3 FY15
Current Ratio1.21.43
Debt/Capital0.450.37
Interest Expense87.077.0
Interest Coverage20.8424.52


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)762.13770.69
Div / share0.60.52
EPS1.61.6
Book value / share25.1823.04
Institutional Own % n/a n/a
Avg Daily Volume3330162.03278515.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 31.51 for the Industrial Conglomerates industry and a discount compared to the S&P 500 average of 25.41. Conducting a second comparison, its price-to-book ratio of 4.68 indicates a significant premium versus the S&P 500 average of 2.83 and a premium versus the industry average of 4.63. The current price-to-sales ratio is above the S&P 500 average, but below the industry average. The valuation analysis reveals that, HONEYWELL INTERNATIONAL INC seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HON 18.39 Peers 31.51   HON 16.66 Peers 33.98

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

HON is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HON is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
HON 16.61 Peers 20.85   HON 1.98 Peers 1.02

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

HON is trading at a discount to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HON trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HON 4.68 Peers 4.63   HON 12.06 Peers 117.14

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HON is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, HON is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HON 2.29 Peers 2.55   HON 1.11 Peers 1.98

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HON is trading at a discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

HON significantly trails its peers on the basis of sales growth

 

 

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