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Honeywell (HON) Rewards Shareholders With 5.4% Dividend Hike

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Honeywell International Inc. HON recently announced that it is rewarding shareholders with a hike in the annual dividend rate. This marks its 12th dividend rate increase in the past 11 years.

The company’s shares inched up 1.6% yesterday to eventually close the trading session at $215.65.

Inside the Headlines

As revealed, Honeywell’s board of directors approved a 5.4% hike in the annual dividend rate. The rate currently stands at $3.92 per share, an increase from the previous annual dividend rate of $3.72. On a quarterly basis, the dividend rate is pegged at 98 cents per share, up from the previous rate of 93 cents.

The company will pay the revised quarterly dividend on Dec 3, 2021, to shareholders of record as of Nov 12. This dividend pertains to the fourth quarter of 2021.

Sound Shareholder-Friendly Policies

Honeywell firmly believes in rewarding shareholders handsomely through dividend payments. In the last three years (2018-2020), the company’s cash dividend paid out increased from $3.05 per share in 2018 to $3.63 in 2020. In September 2020, it had raised the annual dividend rate by 3.3%.

The company follows sound capital-allocation strategies to enhancing shareholders’ values. In the first half of 2021, it paid out dividends worth $1,304 million to shareholders and repurchased shares worth $1,849 million.

We believe that such shareholder-friendly policies of the company reflect a strong cash position. In second-quarter 2021, Honeywell’s free cash flow increased 17% on a year-over-year basis to $1,468 million. For 2021, the company expects free cash flow in the range of $5.3-$5.6 billion.

Zacks Rank, Price Performance and Estimate Trend

Honeywell, with approximately $148.9 billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company stands to gain from solid momentum in its warehouse and workflow solutions business as well as recovery in the commercial aerospace business in the quarters ahead. However, headwinds across its defense and space business might affect performance in the near term.

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Zacks Investment Research

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In the past three months, the company’s shares have declined 2.6% against the industry’s increase of 0.1%.

The Zacks Consensus Estimate for 2021 and 2022 earnings has been stable at $8.10 and $9.21, respectively, in the past 60 days.

Stocks to Consider

Some better-ranked stocks from the same space are Raven Industries, Inc. RAVN, Carlisle Companies Incorporated CSL and Griffon Corporation GFF. While Raven currently sports a Zacks Rank #1 (Strong Buy), Carlisle and Griffon carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Raven pulled off an earnings surprise of 42.59%, on average, in the trailing four quarters.

Carlisle delivered an earnings surprise of 39.38%, on average, in the trailing four quarters.

Griffon reported an earnings surprise of 26.02%, on average, in the trailing four quarters.

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Honeywell International Inc. (HON) : Free Stock Analysis Report

Raven Industries, Inc. (RAVN): Free Stock Analysis Report

Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report

Griffon Corporation (GFF) : Free Stock Analysis Report

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