Honeywell Stock

HONEYWELL INTERNATIONAL, INC. (HON)

FI560 Securities Analysis

Professor: Alan McKnight

By: Kecia Zuber

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Mark C. Honeywell's Signature on Certificate

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Certificate Vignette

What segments of a business should potential investors look into before making a decision to purchase stock or not to purchase stock? Should investors look into companies whose brand in familiar to consumers? How important is it for companies to reinvest profits back into the business as opposed to paying out dividends to shareholders? Honeywell International, Inc. (HON), is a very well know company that takes pride in being one of the top industry leaders in Aerospace & Defense. Consumers should be familiar with HON because of their line of thermostats that can be found in a vast majority of consumers’ home. Research and analysis of HON, reveals the company’s background with a life cycle well into the maturity state, return on equity that has increased every quarter since September 30, 2010, growth earnings expected to continue to be positive/increase over the next 5 years, and calculations of the performance of HON using the CAPM as well as determination of the company’s intrinsic value using discount valuation techniques will be performed using the Graham’s formula. Lastly, comparison of HON within the industry as well as amongst competitors like General Electric Company and United Technologies helps to determine the decision to buy as well as “HOLD” onto this stock if considering adding to your portfolio or if you are getting started in the investing arena as a beginner.

“Honeywell International is a diversified manufacturer that operates four major business segments: aerospace (32% of sales); automation products for process controls, sensing instruments, and safety and security products (41%); specialty materials (14%); and transportation products (13%).” (Honeywell) Honeywell can trace its history back to over 100 years with the invention of the...