June 05, 2025 a 12:46 pm
HON: Dividend Analysis - Honeywell International Inc.
Honeywell International Inc. presents a compelling dividend profile characterized by a stable and robust dividend history. With over five decades of consecutive dividend increases, this company exemplifies reliability. However, its moderate yield in comparison to the sector suggests an investment primarily suited for those valuing consistency over high immediate return. Given the absence of recent dividend cuts, Honeywell stands resilient in maintaining shareholder rewards.
📊 Overview
Honeywell operates within a diversified sector yet boasts a commendable dividend yield and a remarkable history of consecutive dividend payments. Investors should note the significant time since any dividend suspension or cut, reflecting its prioritization of shareholder returns.
| Metric | Data |
|---|---|
| Sector | Industrials |
| Dividend yield | 2.01% |
| Current dividend per share | 4.46 USD |
| Dividend history | 56 years |
| Last cut or suspension | None |
🗣️ Dividend History
With an uninterrupted 56-year track record, Honeywell's dividend history is a badge of reliability. This history underscores the company's commitment to returning profits to shareholders and is a crucial factor in its attractiveness to income-focused investors.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 2.26 USD |
| 2024 | 4.37 USD |
| 2023 | 4.17 USD |
| 2022 | 3.97 USD |
| 2021 | 3.77 USD |
📈 Dividend Growth
Examining Honeywell's dividend growth over recent periods reveals steady increments. This consistent growth is a positive indicator for investors looking for prolonged income enhancement over mere high yield.
| Time | Growth |
|---|---|
| 3 years | 5.05% |
| 5 years | 5.40% |
The average dividend growth is 5.40% over 5 years. This shows moderate but steady dividend growth. Such a trend affirms Honeywell's ability to incrementally enhance shareholder payouts year-over-year, maintaining its attractiveness as a reliable dividend payer.
📉 Payout Ratio
The payout ratio is a critical metric in assessing dividend sustainability. Honeywell maintains a healthy balance between retaining earnings for growth and returning capital to its shareholders.
| Key figure | Ratio |
|---|---|
| EPS-based | 50.78% |
| Free cash flow-based | 56.58% |
At 50.78% (EPS) and 56.58% (FCF), these payout ratios indicate a well-managed dividend policy. Honeywell demonstrates a prudent approach ensuring dividends remain sustainable without constraining future business opportunities.
✅ Cashflow & Capital Efficiency
Financial assessments like Free Cash Flow Yield and Earnings Yield provide insights into operational soundness. Honeywell's capital efficiency ensures continual returns and justified valuation multiples.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.35% | 3.09% | 3.11% |
| Earnings Yield | 3.88% | 4.07% | 3.42% |
| CAPEX to Operating Cash Flow | 18.92% | 19.46% | 14.52% |
| Stock-based Compensation to Revenue | 0.50% | 0.55% | 0.53% |
| FCF / Operating Cash Flow Ratio | 80.91% | 80.54% | 85.48% |
| Return on Invested Capital | 10.20% | 12.72% | 11.26% |
The cash flow metrics present a panorama of operational stability, pivotal for mitigating market volatilities and enabling long-term growth.
⚠️ Balance Sheet & Leverage Analysis
An extensive review of Honeywell's leverage reveals strong financial fundamentals. It signifies financial health, crucial for sustaining dividend payouts.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.73 | 1.36 | 1.23 |
| Debt-to-Assets | 42.85% | 35.00% | 32.98% |
| Debt-to-Capital | 63.38% | 57.60% | 55.16% |
| Net Debt to EBITDA | 2.43 | 1.56 | 1.36 |
| Current Ratio | 1.31 | 1.27 | 1.25 |
| Quick Ratio | 1.01 | 0.93 | 0.98 |
| Financial Leverage | 4.04 | 3.88 | 3.73 |
The overall leverage position is manageable, exhibiting a healthy balance sheet orientation that supports ongoing capital distributions.
📅 Fundamental Strength & Profitability
Fundamental metrics such as Return on Equity and Profit Margins illustrate the company's effective utilization of assets and efficiency in generating profits.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 30.64% | 35.68% | 29.74% |
| Return on Assets | 7.59% | 9.20% | 7.97% |
| Net Margin | 14.82% | 15.43% | 14.00% |
| EBIT Margin | 21.48% | 20.60% | 19.93% |
| EBITDA Margin | 24.95% | 23.81% | 22.55% |
| Gross Margin | 38.08% | 37.28% | 32.82% |
| R&D to Revenue | 4.12% | 3.97% | 4.17% |
The profitability metrics reflect Honeywell's robust capacity to convert revenues into actual earnings, enlightening investors about its future potential.
Price Development
🏆 Dividend Scoring System
| Criteria | Score (1-5) | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 4 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 33/40
🌟 Rating
Honeywell International Inc. offers a strong blend of dividend stability and growth potential. With its strategic balance between returns and reinvestment, Honeywell secures its position as a reliable choice for investors seeking steady income streams. Given its current financial position and historical performance, Honeywell is recommended as a buy for dividend-focused portfolios.