Global diversified technology and manufacturing company Honeywell International Inc. (HON) recently authorized a new share repurchase program as part of its corporate strategy to provide attractive risk-adjusted returns to its stockholders. The new share buyback program replaces the erstwhile $3 billion share repurchase policy that was completed in 2011.
Under the new share repurchase program, Honeywell can repurchase up to $5 billion worth of shares over a period of time through open market transactions. The strategic move signifies an inherent strength in the company’s balance sheet and working capital management that gives it enough confidence to generate adequate cash flow to deliver shareholder value.
Over the years, Honeywell has consistently returned significant cash to its shareholders through dividends and share repurchases. Honeywell’s diversified business portfolio has the potential to earn consistent above-average returns and mitigate operating risks. The company’s diligent focus on working capital management, free cash flow generation and a conservative balance sheet remain the key positives amid a challenging macroeconomic environment.
Based in Morris Township, NJ, Honeywell manufactures a wide range of aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals and energy efficient products and solutions for homes, business and transportation.
Honeywell organizes its business into four operating segments – Aerospace, Automation and Control Solutions, Performance Materials and Technologies, and Transportation Systems. Honeywell’s diversified business portfolio mitigates operating risks and enables it to earn consistent above-average returns.
Honeywell also has a Zacks Rank #3 (Hold). Other notable companies in the industry include ITT Corp. (ITT), Hutchison Whampoa Ltd. (HUWHY), and Raven Industries Inc. (RAVN), each carrying a Zacks Rank #2 (Buy).
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- share repurchase