Should You Be Holding Honeywell Automation India Limited (NSE:HONAUT)?
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Honeywell Automation India Limited (NSE:HONAUT) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of HONAUT, it is a financially-robust company with a strong history and a excellent future outlook. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, take a look at the report on Honeywell Automation India here.
Flawless balance sheet with outstanding track record
In the previous year, HONAUT has ramped up its bottom line by 44%, with its latest earnings level surpassing its average level over the last five years. This strong performance generated a robust double-digit return on equity of 21%, which is an optimistic signal for the future.
HONAUT's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that HONAUT manages its cash and cost levels well, which is a key determinant of the company’s health. HONAUT currently has no debt on its balance sheet. This means it is running its business only on equity capital funding, which is rather impressive for a ₹218b market cap company. HONAUT has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.
Next Steps:
For Honeywell Automation India, there are three essential factors you should further research:
Valuation: What is HONAUT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether HONAUT is currently mispriced by the market.
Dividend Income vs Capital Gains: Does HONAUT return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from HONAUT as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of HONAUT? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
