At the request of one of my readers I am analyzing Honeywell International Inc (HON). For most dividend growth investors, the company is probably under the radar since it has only been raising the dividend for nine consecutive years. But the stock has a respectable yield, the dividend is seemingly safe, and the company is positioned in several growing market segments such as aerospace and defense and performance materials, and margins have been trending up for years. This combination from this industrial powerhouse is desirable from the perspective of a dividend growth investor. On the con side, the company did suffer during the Great Recession and the dividend was frozen so there is some risk here when the economy goes bad at some point in the future. However, the stock price recovered after the Great Recession and has been trending up as the US economy bounced back. At the right price Honeywell could be a good addition to a dividend growth portfolio but investors should wait for a better entry point at this juncture.
Overview of Honeywell
Honeywell is a global industrial conglomerate that traces its modern structure back to 1985. The company operates four business segments: Aerospace, Honeywell Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions. This gives the company exposure to the aerospace and defense markets, construction, the oil & gas industries, as well as others. Honeywell spun off Garrett Motion (GTX), which manufactures turbochargers for cars, in 2018. Honeywell also spun off Resideo Technologies (REZI), which sells residential comfort and security solutions, in 2018. The company also spun off AdvanSix (ASIX), which manufactures caprolactam to make Nylon 6, in 2016. The company had about $37B in sales in 2019 of which $14.1B was Aerospace, $10.8B was Performance Materials and Technologies, $6.1B was Safety and Productivity Solutions, and $5.7B was Honeywell Building Technologies.
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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.