Honeywell International Inc's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance of Honeywell International Inc
Honeywell International Inc (NASDAQ:HON) recently announced a dividend of $1.08 per share, payable on 2024-03-15, with the ex-dividend date set for 2024-02-29. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Honeywell International Inc's dividend performance and assess its sustainability.
What Does Honeywell International Inc Do?
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Honeywell traces its roots to 1885 with Albert Butz's firm, Butz-Thermo Electric Regulator, which produced a predecessor to the modern thermostat. Today, Honeywell International Inc is a global multi-industry behemoth with one of the largest installed bases of equipment. It operates through four business segments: aerospace, building technologies, performance materials and technologies, and safety and productivity solutions. In recent years, the firm has made several portfolio changes, including the addition of Intelligrated in 2016, as well as the spinoffs of Garrett and Resideo in 2018. In 2019, the firm launched Honeywell Forge, its enterprise performance management software solution that leverages the firm's domain expertise in buildings, airlines, and critical infrastructure.
A Glimpse at Honeywell International Inc's Dividend History
Honeywell International Inc has maintained a consistent dividend payment record since 1986, with dividends currently distributed on a quarterly basis. Additionally, Honeywell International Inc has increased its dividend each year since 1992. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 32 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Honeywell International Inc's Dividend Yield and Growth
As of today, Honeywell International Inc currently has a 12-month trailing dividend yield of 2.09% and a 12-month forward dividend yield of 2.17%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, Honeywell International Inc's annual dividend growth rate was 4.70%. This rate increased to 6.20% per year over a five-year horizon, and over the past decade, Honeywell International Inc's annual dividends per share growth rate stands at 9.80%.
Based on Honeywell International Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Honeywell International Inc stock as of today is approximately 2.82%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Honeywell International Inc's dividend payout ratio is 0.45.
Honeywell International Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Honeywell International Inc's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Honeywell International Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Honeywell International Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Honeywell International Inc's revenue has increased by approximately 6.10% per year on average, a rate that outperforms approximately 51.17% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Honeywell International Inc's earnings increased by approximately 13.50% per year on average, a rate that outperforms approximately 44.86% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 0.60%, which outperforms approximately 27.71% of global competitors.
Concluding Insights on Honeywell International Inc's Dividend Sustainability
In conclusion, Honeywell International Inc's upcoming dividend payment, consistent dividend growth, manageable payout ratio, and solid profitability and growth metrics paint a promising picture for value investors. The company's ability to maintain and grow its dividend over the years, alongside its financial strength, positions it as an attractive option for those seeking stable income streams from their investments. As investors continue to navigate the ever-changing market landscape, Honeywell International Inc stands out as a company with a reliable dividend policy backed by a robust business model. Will Honeywell International Inc continue its legacy as a dividend aristocrat in the years to come? Only time will tell, but the indicators certainly point towards a positive trajectory.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
