GMS or LL: Which Is the Better Value Stock Right Now?
Honeywell International Inc. HON recently announced that its Honeywell Connected Plant service has been selected by Secunda Synfuels Operations — an operating division of Sasol South Africa Ltd. Notably, Secunda Synfuels Operations will use Honeywell Connected Plant service for monitoring the operating reliability of its two Honeywell UOP CCR Platforming units at its refinery, located in South Africa’s Secunda.
The Honeywell Connected Plant is a suite of applications that help in optimizing operations and predict plant failures, thus offering better safety, efficiency and profitability. As a part of the company’s Connected Plant portfolio, Process Reliability Advisor improves the operations of petrochemical and gas processing plants by resolving processing issues. Additionally, it enables plants to avoid unplanned downtime for maintenance and repair. Honeywell also offers Process Optimization Advisor service, which constantly monitors streaming plant data and applies Honeywell UOP process models. This helps refiners to determine the combination of products, which is likely to be most profitable as the products’ prices vary on a day to day basis.
Existing Business Scenario
Honeywell’s balanced mix of long- and short-cycle businesses, impressive organic growth in new products and expansion in high-growth regions are encouraging. With a flexible yet disciplined focus on cost and productivity, Honeywell remains focused on increasing its presence in high-growth regions. Also, the company is building a robust pipeline of new products. For instance, in Home and Building technologies, Honeywell introduced INNCOM e7 Thermostat for hotels, which has got a large user base across the globe. Currently, the company is experiencing increased demand for its connected aircraft offerings from its customers.
In a year’s time, shares of this Zacks Rank #2 (Buy) company have returned 8.3% against the industry’s decline of 16.4%.
Moreover, the company is well-positioned to gain from long-term expansion in markets like aerospace, facility automation and automotive turbochargers backed by its improved market share and product line-up. Additionally, Honeywell’s continuous investment in innovative technologies is likely to help it maintain leadership position. At the same time, the company has been boosting its sales outside the United States, particularly in the emerging markets like China. As emerging markets expand, the demand for the company's construction, automobiles and airplanes products are likely to witness an improvement.
Further, the company’s diversified business portfolio enables it to earn consistent above-average returns and mitigate operating risks. Also, its diligent focus on working capital management, free cash flow generation and a conservative balance sheet are look promising amid a challenging macroeconomic environment.
Other Key Picks
Some other top-ranked stocks from the same space are Raven Industries, Inc. RAVN, Federal Signal Corporation FSS and United Technologies Corporation UTX. While Raven Industries sports a Zacks Rank #1 (Strong Buy), Federal Signal and United Technologies carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Raven Industries surpassed estimates twice in the trailing four quarters, with an average positive earnings surprise of 9.78%.
Federal Signal outpaced estimates in the preceding four quarters, with an average earnings surprise of 16.07%.
United Technologies exceeded estimates in the preceding four quarters, with an average positive earnings surprise of 6.82%.
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Honeywell International Inc. (HON) : Free Stock Analysis Report
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