Honeywell International Inc

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HON : NYSE : Industrial Goods
$116.81 up 0.05 | 0.04%
Today's Range: 116.36 - 117.23
Avg. Daily Volume: 2,588,200
08/25/16 - 4:00 PM ET

Financial Analysis


HONEYWELL INTERNATIONAL INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. HONEYWELL INTERNATIONAL INC has weak liquidity. Currently, the Quick Ratio is 0.87 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 1.70% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)9991.09775.0
EBITDA ($mil)2217.02074.0
EBIT ($mil)1957.01848.0
Net Income ($mil)1282.01194.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)5045.05954.0
Total Assets ($mil)51181.046412.0
Total Debt ($mil)14013.09719.0
Equity ($mil)18771.018457.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin35.1233.75
EBITDA Margin22.1821.21
Operating Margin19.5918.91
Sales Turnover0.760.85
Return on Assets9.629.55
Return on Equity26.2424.01
Debt Q2 FY16 Q2 FY15
Current Ratio1.281.49
Debt/Capital0.430.34
Interest Expense90.082.0
Interest Coverage21.7422.54


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)760.88781.76
Div / share0.60.52
EPS1.661.51
Book value / share24.6723.61
Institutional Own % n/a n/a
Avg Daily Volume2583869.03462348.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 24.28 for the Aerospace & Defense industry and a discount compared to the S&P 500 average of 25.30. To use another comparison, its price-to-book ratio of 4.70 indicates a significant premium versus the S&P 500 average of 2.83 and a significant discount versus the industry average of 27.77. The price-to-sales ratio is above the S&P 500 average and well above the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, HONEYWELL INTERNATIONAL INC proves to trade 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 18.33 Peers 24.28   HON 16.30 Peers 17.34

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

HON is trading at a discount to its peers.

 

Average. 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 valuation on par 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 15.98 Peers 19.37   HON 1.73 Peers 1.87

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.

 

Average. 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 valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HON 4.70 Peers 27.77   HON 13.05 Peers 161.87

Discount. 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 significant discount to 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 2.25 Peers 1.69   HON -0.66 Peers 3.82

Premium. 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 significant premium to its industry.

 

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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