Honeywell International's 5-Year Shareholder Return Tops Market Average, Dividend Payments Drive TSR

Honeywell International's shareholders have seen a 55% return over the last five years, despite a 40% increase in the stock price. The company's earnings per share have grown at 1.8% annually, which is lower than the 7% average annual increase in the share price. The TSR for the last 5 years was 55%, exceeding the share price return due to dividend payments. However, the company's TSR for the last 12 months was 13%, which is short of the market average.

Honeywell International Inc. (HON), a diversified technology and manufacturing company, has seen mixed performance over the past year. While the stock has gained 10.3% over the past 52 weeks, it has underperformed the broader market, the S&P 500 Index, and the Industrial Select Sector SPDR Fund (XLI) [1]. This underperformance was exacerbated by a significant drop in stock price following the company's Q2 earnings report, which saw a 6.2% decline in a single trading session [1].

Honeywell's Q2 results highlighted a mixed bag of performance. The company reported solid organic revenue growth, driven by double-digit growth in defense & space and UOP organic sales, with net sales increasing by 8.1% year-over-year [1]. However, these positives were overshadowed by an 8.6% decline in free cash flows and a contraction in operating margins by 30 bps to 20.4% [1]. For the full fiscal 2025, analysts expect Honeywell to deliver an adjusted EPS of $10.57, up 6.9% year-over-year [1].

Despite the mixed performance, analysts remain largely optimistic about Honeywell. Of the 23 analysts covering the stock, 13 have a "Strong Buy" rating, and 10 have a "Hold" rating [1]. RBC Capital analyst Deane Dray recently lowered the firm's price target on Honeywell from $254 to $253 but maintained a "Sector Perform" rating on the stock [1]. The mean price target of $255.05 represents a 17.5% upside potential, while the street-high target of $300 suggests a notable 38.3% premium to current price levels [1].

Honeywell's shareholders have seen a 55% return over the last five years, despite a 40% increase in the stock price. The company's earnings per share (EPS) have grown at 1.8% annually, which is lower than the 7% average annual increase in the share price [2]. The Total Shareholder Return (TSR) for the last 5 years was 55%, exceeding the share price return due to dividend payments. However, the company's TSR for the last 12 months was 13%, which is short of the market average [2].

In conclusion, Honeywell International presents a mixed picture of performance and analyst opinions. While the stock has underperformed the broader market, analysts remain optimistic, and the company's earnings per share have grown steadily. The key to Honeywell's future performance will likely lie in its ability to manage its margins and maintain its growth trajectory.

References:
[1] https://www.barchart.com/story/news/34099041/are-wall-street-analysts-predicting-honeywell-international-stock-will-climb-or-sink
[2] https://finance.yahoo.com/news/china-gold-international-resources-tse-101803649.html