Tuesday, January 31, 2017

Honeywell Still Better Than The Market Wants To Believe

Honeywell (NYSE:HON) hasn't done badly since I last wrote about this conglomerate. In fact, among what I'd consider to be its peer group (including names like 3M (NYSE:MMM), GE (NYSE:GE), Dover (NYSE:DOV) and so on), Honeywell has done okay, with a nearly 10% improvement in its share price. That's not as good as the double-digit improvements at Illinois Tool Works (NYSE:ITW) or Dover, but it's not exactly a disgrace either.

Honeywell doesn't have the same upside to a near-term turnaround in the industrial economy that I would expect from ITW or Dover, but it is nevertheless well-positioned for long-term growth trends like automation, civil aerospace, industrial software and specialty chemicals. What's more, there's more than the normal level of negative chatter around Honeywell, with investors fretting about the CEO change and an entrenched (although not really supported, in my opinion) belief that Honeywell has underinvested in R&D and innovation. Provided that Honeywell can deliver mid-single-digit growth over the long term, I think a double-digit total return is possible from here, and I think Honeywell is still worth consideration as a potential buy.

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Honeywell Still Better Than The Market Wants To Believe

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