Honeywell International

[crimsonghost747]

A good dividend history, good EPS growth for the past few years and estimates for 2015 EPS are hovering around the $6 mark. Management has said that they plan on increasing the payout ratio (currently 35% on 2014 EPS and around 30% for 2015 EPS estimates) so it doesn't look too far fetched for them to keep up the roughly 10% dividend increases. Next increase should come in October. P/E is around 19 so slightly lower than the S&P500 average. Y/Y revenue was down on their latest report but EPS was up around 10% Y/Y.

To me this seems like a decently valued large industrial company with a well diversified portfolio of different products. I have not hit the buy button yet but it sure seems like a nice possible addition to my portfolio. The valuation seems acceptable and both the EPS and dividend growth look to be something that DGI investors would value. Starting yield at 2% is a bit too low for my taste but that is not something that will stop me from buying since I do plan on holding for pretty much eternity.

Anyone who owns Honeywell? What are your thoughts on the company?

[earthtodan]

I've had HON on my watch list for a while, but never really understood what sets them apart. They're diversified, so it's futile to try to understand them on the basis of all their products and end markets. They have an aerospace segment and make jet engines, which is cool and moaty, but only for small regional and private jets. They have a dividend history and a buyback and a solid growth profile just like the other major industrial players and would probably make a great investment. I just haven't seen a case as to why they're a better company to own than say, UTX or MMM.

[crimsonghost747]

Very good question, I really don't know if there is anything that sets them apart. None of these companies are really relying on any single product line and their income comes from thousands of different products, like you said it's futile to try and understand all of that in details. In the end it's about their management and how good they can be at creating new high margin products.

Valuation seems to be roughly the same with all 3 of those, MMM being the only one that jumps over P/E 20. With my super low fees I guess I could just aswell grab shares in all 3 of those, and throw GE in the mix just for fun. Wouldn't make a noticeable difference commission wise but I think it's easier to keep track of what's going on if I don't own a million different companies.

I'll take a deeper look at some of the other similar ones, HON does look good but of course there are many similar options available.