By Rob Otman
Honeywell (NYSE: HON) is a large cap company that operates within the industrial conglomerates industry. Its market cap is $104 billion today, and the total one-year return is 16.84% for shareholders.
Honeywell stock is beating the market, and it reports earnings on Friday. But does that make it a good buy today? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
[iu-adbox]
✗ Earnings-per-Share (EPS) Growth: Honeywell reported a recent EPS growth rate of 10.13%. That’s below the industrial conglomerates industry average of 72.06%. That’s not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the industrial conglomerates industry is 19.67. And Honeywell’s ratio comes in at 18.92. It’s trading at a better value than many of its competitors.
✓ Debt-to-Equity: The debt-to-equity ratio for Honeywell stock is 77.48%. That’s below the industrial conglomerates industry average of 170.31%. The company is less leveraged.
✓ Free Cash Flow per Share Growth: Honeywell’s FCF has been higher than that of its competitors over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
✓ Profit Margins: The profit margin of Honeywell comes in at 13.97% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Honeywell’s profit margin is above the industrial conglomerates average of 11.52%. So that’s a positive indicator for investors.
✓ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Honeywell is 25.35%, and that’s above its industry average ROE of 11.67%.
Honeywell stock passes five of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Strong Buy.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
If you’re interested in finding Strong Buy stocks yourself, check out Fundamental Analysis Pro. It’s a free five-part mini-course that will teach you how to grade stocks like a Wall Street veteran. Click here to learn more. …read more
Source:: Investment You
The post Is Honeywell Stock Undervalued or Overvalued Before Earnings? appeared first on Junior Mining Analyst.