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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Honeywell International Inc. (XNAS:HON) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HON
Name:
HONEYWELL INTERNATIONAL INC. (XNAS:HON)
Sector:
- 147000.00K
Industry:
Conglomerates
CEO:
Mr. Darius Adamczyk
Total Employees:
99,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -58.37% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF HONEYWELL INTERNATIONAL INC.(HON) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CONGLOMERATES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
186.89
One Month Price Target:
$188.
Six Month Price Target :
$193.53
Likely Price in One Year's Time:
Ticker:
$200.17
Likely Trading Range Today Under (Normal Volatility)
$186.3
Price Upper limit ($) :
$187.59
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$179.14
This week:
$169.57
This month :
$152.25
Other Primary facts
Market Cap:
125.91B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
673.69M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.07%
-12.09%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$222.84
$206.37
$150.94
$167.41
Medium risk (<10%) entry points
Buy Call
Sell Call
$201.02
Buy Put:
Sell Put:
$197.50
$172.72
$176.28
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HON
Sharpe Ratio:
1.01%
Comparison:
HON, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 145.33% higher than the industry
& is -55.76% lower than the market/S&P 500 average
Average Returns/Yield of
HON
Daily returns:
0.03%
Weekly returns:
0.15%
Monthly returns:
0.59%
Yearly returns:
4.65%
Comparison of returns:
Average annual returns/yield (last 3 years) is 51.30% above industry average
Classification:
HON, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.21
Statistical test of Returns:
HON has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.03%
Weekly Volatility:
4.54%
Monthly Volatility:
9.09%
Yearly Volatility:
31.49%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.13%
Volatility in last five trading days has been -44.61% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.14%
Weekly VaR:
-9.27%
Monthly VaR:
-18.54%
How Much Can the price of
HON
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-64.21%
This translates to price declining to:
$156.88
This translates to price declining to:
$66.89
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
HON is a 30.82% riskier investment compared to the market/S&P 500 & is 12.07% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -8.21% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HON
Beta in relation to market/S&P 500--1.06
Expected beta in 1 year's time:
0.744
Expected beta in 3 year's time:
1.052
Unlevered (debt free) Beta:
0.692
Beta in relation to Nasdaq (XNAS):
0.699
Beta in relation to all global stocks::
0.705
Beta Comparison & Analysis
Beta of competitors/peers::
1.019
Beta is 3.82% higher than peers
Average Industry Beta:
0.865
Beta is 22.35% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
16.10%
Sustainable growth rate is 36.55% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.034
Alpha is -24.09% below industry average alpha yield
Alpha is -213% below the market average
Analysis of Cost of Capital of
HON
Equity cost of capital:
0.104
Equity cost of capital is 14.59% above industry mean WACC
Unlevered (without debt) cost of capital:
6.80%
Before-tax cost of debt:
1.75%
After-tax cost of debt:
1.38%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.38%
WACC is 10.11% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$50.93
Revenue growth rate per share of (3Y):
6.61
Annual revenue growth rate is -221.62% below industry average
EPS:
$6.53
Expected Annual growth rate of EPS (3Y):
-2.45%
Expected future EPS growth rate is 166.67% higher than the Conglomerates industry
Free cash flow (FCF) per share:
$6.11
Balance sheet equity growth per share: 24.35%
Equity growth rate per share is -1960.58% lower than the industry
Debt per share
$18.76
EBITDA per share
$12.44
Valuation Analysis Today of
HON
P/E Ratio:
25.49
P/E Ratio of Competitors/Peers:
16.2
P/E ratio is 57.29% higher than main peers & is -77.53% lower than the industry
Stock price/value with industry average P/E ratio: $740.79
HON is -74.77% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $51.38
Present value of the expected future dividends only: $40.98
P/S (Price to Sales ratio):
3.67
Price to sales ratio is 122.60% above the industry mean
P/B (Price to book value ratio):
6.61
Price to free cash flow: 30.57
-
Net income growth rate (3Y):
-11.86%
Net income growth rate is -97.66% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 12.73%
Dividend yeild: 2.07%
Previous Dividend: $0.98
Previous adjusted dividend: $0.98
Previous Dividend: $3.87
Expected next dividend best case: $1.01
Expected next dividend worst case: $0.95
Average dividend payment (long-term): $0.93
Average dividend increase/decrease (growth rate) % per period: 0.87%
Expected next dividend payment date: 09/01/2022
Expected next dividend record date: 08/11/2022
Expected next dividend declaration date: 25/07/2022
Previous dividend payment date: 06/03/2022
Previous dividend record date: 13/05/2022
Previous dividend declaration date: 25/04/2022
Dividend History:
2022-05-12--$0.98
2021-11-10--$0.98
2021-05-13--$0.93
2022-02-24--$0.98
2021-08-12--$0.93
2021-02-25--$0.93
Dividend growth rate is -103.76% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
68.80%
Net debt to equity ratio:
54.93%
Debt to assets ratio:
19.95%
Net debt to assets ratio:
15.92%
Debt-to-asset ratio is -67.79% below industry average
Ability to repay debt:
Interest coverage ratio:
24.8
Interest coverage ratio is 901.44% more than industry average
Looking forward:
Debt growth rate:
-15.57%
Annual debt growth is 109% higher than industry average debt growth rate
Debt repayment rate in last quarter: 9.12%
Analysis of Key Statistics
Correlation of price movement with the market:
0.782
Statistical significance of correlation:
HON has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.578
Stock price is 35.23% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.578
Correlation of price movement with Nasdaq (^IXIC):
0.021
Covariance of price movement with the market:
0.024
Kurtosis
9.507
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.193
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
HON
Gross Profit Margin Ratio:
128%
Operating Profit Margin Ratio:
17.37%
Operating profit margin is 126.54% higher than the industry
Net Profit Margin Ratio:
128%
Effective Tax Rate:
23.01%
Effective tax rate is 36.84% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
28.58%
Return on equity (ROE) is 48.47% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
8.29%
Return on assets (ROA) is 41.22% higher than the industry
Financial Leverage:
1.2x
Current Ratio:
1.21
Current ratio is -47.91% below industry average
Cash Conversion Cycle (days):
-8.9
Cash conversion cycle is -120.79% below industry average
The remaining useful life of property plant & equipment is: 1.6 years
Stock based compensation to net income ratio:
1.14%
In-depth Efficiency Analysis
Revenue generated per employee:
346.6K
Each employee generates -14% less revenue than industry average revenue per employee
EBITDA generated per employee:
84.7K
Each employee generates 45% more EBITDA than industry average revenue per employee
Profit generated per employee:
53.0K
Each employee generates 64% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 1.5K
Each employee generates 8% more free cash flow than industry average revenue per employee
Assets/Capital per employee
394.7K
Each employee generates 8% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
HON
RAYTHEON TECHNOLOGIES CORPORATION (XNYS:RTX)
UNION PACIFIC CORPORATION (XNYS:UNP)
THE BOEING COMPANY (XNYS:BA)
DEERE & COMPANY (XNYS:DE)
GENERAL ELECTRIC COMPANY (XNYS:GE)
UNITED PARCEL SERVICE, INC. (XNYS:UPS)
3M COMPANY (XNYS:MMM)
LOCKHEED MARTIN CORPORATION (XNYS:LMT)
Canadian National Railway Company (XNYS:CNI)
Current Analyst Ratings
Strong buy�29%
Buy�38%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
34.31B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
23.36B
10.96B
-
-
4.99B
-
-
4.99B
71.00M
338.00M
1.21B
8.38B
5.96B
5.25B
6.88B
1.58B
5.25B
Statement of Cash Flow
Date:
Period:
330.00M
Differed Income Tax :
21.00M
Stock Based Compensation :
60.00M
Change in Working Capital :
- 1446000.00K
Accounts Receivables:
- 285000.00K
Other Working Capital:
-
Other Non-Cash Items:
- 63000.00K
Net Cash Provided by Operating Activities:
36.00M
Investments in PP&E:
-
Net Acquisitions:
- 176000.00K
Purchases of Investments:
- 223000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
9.28B
493.00M
9.77B
7.12B
5.47B
1.92B
24.28B
5.47B
17.86B
3.53B
1.04B
494.00M
10.68B
39.07B
-
63.35B
6.29B
6.73B
-
-
7.01B
20.03B
12.64B
9.24B
24.27B
-
44.29B
958.00M
43.29B
- 2787000.0K
-
March 31, 2022 at 6:00:00 AM
28.35B
18.37B
62.66B
1.53B
19.37B
10.1B
365.00M
24.00M
- 10000.00K
- 1268000.00K
23.00M
- 1018000.00K
- 668000.00K
1.21B
- 1719000.00K
15.00M
- 1678000.00K
9.28B
10.96B
36.00M
- 183000.00K
- 147000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
HON
2023
2024
2025
2026
2027
$191.50
$205.12
$219.70
$235.31
$252.04