Our analysis is based on comparing Honeywell International, Inc. with the following peers – United Technologies Corporation, Boeing Company, Emerson Electric Co., General Electric Company, Lockheed Martin Corporation, General Dynamics Corporation, BAE Systems plc Sponsored ADR, SAFRAN SA Unsponsored ADR, Rolls-Royce Holdings PLC Sponsored ADR and Dow Chemical Company (UTX-US, BA-US, EMR-US, GE-US, LMT-US, GD-US, BAESY-US, SAFRY-US, RYCEY-US and DOW-US).
Honeywell International, Inc.’s dividend yield is 1.99 percent and its dividend payout is 39.94 percent. This compares to a peer average dividend yield of 2.76 percent and a payout level of 51.36 percent. This relatively lagging dividend performance could spur some dividend action going forward – as long as the company’s relatively strong dividend quality score of 92 out of a possible score of 100 looks sustainable.
Dividend Quality Overview
- Over the last twelve months (prior to March 31, 2017), HON-US paid a high quality dividend, which represents a yield of 1.93% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were high quality and 1 was medium quality.
- The ending cash balance, with a dividend coverage of 5x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Quadrant label definitions. Hover to know more
Over the last twelve months (prior to March 31, 2017), HON-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 3.22x), investing cash flow (coverage of -1.43x), issuance cash flow (coverage of 0.94x) and twelve-month prior cash (coverage of 2.33x), for a total dividend coverage of 6x.
HON-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -0.37x). Thus, the total coverage including share buybacks is 6.37x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||2.44||1.89||1.93||2.16||2.17||1.99|
|Dividend Payout (%)||41.4||34.15||35.04||35.55||39.52||39.94|
A complete list of metrics and analysis is available on the company page.
Honeywell International, Inc. is a diversified technology and manufacturing company. It offers aerospace products and services; turbochargers; control, sensing and security technologies for buildings and homes; specialty chemicals; electronic and advanced materials; process technology for refining and petrochemicals; and energy efficient products and solutions for homes, business and transportation. The company operates through the following segments: Aerospace; Automation and Control Solutions; and Performance Materials and Technologies. The Aerospace segment supplies aircraft engines, integrated avionics, systems and service solutions, and related products and services for aircraft manufacturers, airlines, aircraft operators, military services, and defense and space contractors. The Aerospace segment’s products and services include auxiliary power units, propulsion engines, environmental control systems, connectivity, electric power systems, engine controls, flight safety, communications, navigation, radar and surveillance systems, aircraft lighting, management and technical services, logistics services, advanced systems and instruments, aircraft wheels and brakes, repair and overhaul services, turbochargers and thermal systems. The Automation and Control Solutions segment provides products, software and technologies for environmental and energy solutions; sensors, switches and controls for sensing and productivity solutions; security and fire safety products; industrial safety products; and building solutions and services for homes, commercial buildings and industrial facilities. The Performance Materials and Technologies segment develops and manufactures advanced materials, process technologies and automation solutions. Its process technology and products include catalysts and adsorbents, equipment and consulting services to produce gasoline, diesel, jet fuel, petrochemicals and renewable fuels for the petroleum refining, gas processing and petrochemical industries. Honeywell International was founded by Albert M. Butz in 1885 and is headquartered in Morris Plains, NJ.
The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.