Critical Survey: Honeywell International (HON) & 3M (NYSE:MMM)
Honeywell International (NYSE: HON) and 3M (NYSE:MMM) are both large-cap multi-sector conglomerates companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitabiliy and dividends.
Insider & Institutional Ownership
76.4% of Honeywell International shares are held by institutional investors. Comparatively, 65.7% of 3M shares are held by institutional investors. 1.6% of Honeywell International shares are held by company insiders. Comparatively, 0.6% of 3M shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Honeywell International and 3M’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Honeywell International||$39.27 billion||2.65||$7.82 billion||$6.45||21.14|
|3M||$30.39 billion||4.15||$8.69 billion||$8.27||25.53|
3M has higher revenue, but lower earnings than Honeywell International. Honeywell International is trading at a lower price-to-earnings ratio than 3M, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Honeywell International has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, 3M has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.
Honeywell International pays an annual dividend of $2.66 per share and has a dividend yield of 2.0%. 3M pays an annual dividend of $4.70 per share and has a dividend yield of 2.2%. Honeywell International pays out 41.2% of its earnings in the form of a dividend. 3M pays out 56.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Honeywell International has raised its dividend for 58 consecutive years and 3M has raised its dividend for 6 consecutive years.
This table compares Honeywell International and 3M’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and target prices for Honeywell International and 3M, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Honeywell International currently has a consensus target price of $136.00, suggesting a potential downside of 0.26%. 3M has a consensus target price of $199.10, suggesting a potential downside of 5.71%. Given Honeywell International’s stronger consensus rating and higher probable upside, research analysts clearly believe Honeywell International is more favorable than 3M.
3M beats Honeywell International on 9 of the 17 factors compared between the two stocks.
Honeywell International Company Profile
Honeywell International Inc. is a technology and manufacturing company. The Company operates through four segments: Aerospace, Home and Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions. The Company’s Aerospace segment supplies products, software and services for aircraft and vehicles that it sells to original equipment manufacturers (OEMs) and other customers. The Home and Building Technologies segment provides products, software, solutions and technologies that help owners of homes stay connected and in control of their comfort, security and energy use. The Performance Materials and Technologies segment is engaged in developing and manufacturing materials, process technologies and automation solutions. The Safety and Productivity Solutions segment is engaged in providing products, software and connected solutions to customers that manage productivity, workplace safety and asset performance.
3M Company Profile
3M Company is a technology company. It operates through five segments. The Industrial segment serves a range of markets, such as automotive original equipment manufacturer and automotive aftermarket, electronics, appliance, paper and printing, packaging, food and beverage, and construction. The Safety and Graphics segment serves a range of markets for the safety, security and productivity of people, facilities and systems. The Health Care segment serves markets that include medical clinics and hospitals, pharmaceuticals, health information systems, and food manufacturing and testing. The Electronics and Energy segment serves customers in electronics and energy markets, including solutions for the performance of electronic devices; electrical products, including infrastructure protection, and power generation and distribution. The Consumer segment serves markets that include consumer retail, office business to business, home improvement, drug and pharmacy retail, and other markets.
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