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Honeywell Rewards Shareholders With 5% Dividend Increase

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In a shareholder-friendly move, Honeywell International (HON - Free Report) recently raised its quarterly dividend by approximately 5% to $1.13 per share (annually: $4.52). The new dividend will be paid on Dec. 6, 2024, to shareholders of record as of Nov. 15.

The latest dividend hike marks Honeywell’s 15th consecutive raise since 2010. This underscores its sound financial health as it utilizes free cash flow to enhance shareholders’ returns.

In the first six months of 2024, HON rewarded shareholders with $1.45 billion in dividends and $1.20 billion in share repurchases. Also, in 2023, it paid out dividends worth $2.86 billion and repurchased shares for $3.72 billion. It’s worth noting that in the second quarter of 2024, HON generated a free cash flow of $1.11 billion. The company expects a free cash flow in the range of $5.5-$5.9 billion for 2024.

Apart from repurchasing shares and paying out dividends, Honeywell deploys its capital to make acquisitions. In September 2024, it acquired CAES Systems Holdings (“CAES”) from private equity firm Advent. The transaction will augment its defense technology offerings across various domains, including land, sea, air and space.

Also, in June 2024, the company acquired Carrier’s Global Access Solutions business for an all-cash deal of $4.95 billion. The inclusion of Global Access Solutions’ expertise in advanced access and security solutions, coupled with its impressive growth and margin profile, is enabling it to expand its security products portfolio and boost its building automation segment.

HON’s Zacks Rank & Price Performance

Honeywell, with approximately $134.9 billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company is set to gain from strength in commercial aviation and defense & space markets driven by solid demand for air travel and stable U.S. and international defense spend volumes. However, softness in its Industrial Automation segment remains a concern.

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In the past year, the company’s shares have gained 13.7% compared with the industry’s 21.3% growth.

The Zacks Consensus Estimate for earnings is pegged at $10.14 per share for 2024, indicating a decrease of a penny from the 30-day-ago figure.

Stocks to Consider

Some better-ranked companies from the same space are discussed below.

Federal Signal Corporation (FSS - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Federal Signal delivered a trailing four-quarter average earnings surprise of 12.3%. In the past 30 days, the Zacks Consensus Estimate for FSS’ 2024 earnings has been stable.

Vector Group Ltd. presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 15.4%.

In the past 30 days, the Zacks Consensus Estimate for VGR’s 2024 earnings has remained unchanged.

Carlisle Companies Incorporated (CSL - Free Report) currently carries a Zacks Rank of 2. CSL delivered a trailing four-quarter average earnings surprise of 16.3%.

In the past 30 days, the consensus estimate for Carlisle’s fiscal 2025 earnings has decreased by a penny.


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