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Honeywell (HON) to Gain From Solid Demand in End Markets

Zacks Equity Research

On Jan 3, we issued an updated research report on Honeywell International Inc. HON.

Over the past year, this Zacks Rank #2 (Buy) stock has yielded a return of 34.3% compared with the industry’s growth of 27.7%.

Existing Scenario

Strength in commercial aftermarket business, and solid demand across both air transport and business aviation markets are likely to drive Honeywell’s Aerospace segment’s revenues in the quarters ahead. Also, strong demand for commercial fire and building management products are likely to boost revenues of the Building Technologies segment. Further, strength in its intelligrated aftermarket service business, driven by healthy demand for life cycle support and services, is likely to augment Safety and Productivity Solutions segment’s top line.For 2019, it currently anticipates generating revenues in the range of $36.7-$36.9 billion.

Going forward, the company’s continued focus on productivity improvements, greater operational excellence, supply chain initiatives and share buybacks are likely to drive profitability. For 2019, the company anticipates earnings to be in the range of $8.10 to $8.15 per share compared with $7.95-$8.15 guided earlier.

Moreover, the company remains committed to rewarding shareholders through dividend payments and share repurchase program. Notably, in the third quarter of 2019, the company paid out dividends worth $595 million to shareholders and repurchased shares worth $1 billion. Notably, the quarterly dividend rate was hiked 10% in September 2019. Such diligent capital deployment strategies boost shareholders' wealth.

Other Key Picks

Some other top-ranked stocks are Kaman Corporation KAMN, Berry Global Group, Inc. BERY and ITT Inc. ITT. While Kaman and Berry Global sport a Zacks Rank #1 (Strong Buy), ITT carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kaman delivered average positive earnings surprise of 7.72% in the trailing four quarters.

Berry Global delivered average positive earnings surprise of 0.70% in the trailing four quarters.

ITT delivered average positive earnings surprise of 7.85% in the trailing four quarters.

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