September 27, 2020

Honeywell: An Industrial Stock Pivoting to New Opportunities

 

A proxy for the coming Internet of Things and software used in industrial settings

  


Just a few weeks ago, on Aug. 31, Honeywell International Inc. (NYSE:HON) joined the ranks of the Dow Jones Industrial Average (DJI), the index that is supposed to reflect the broader market of all stocks traded in the United States.

 

It's a prestigious move, but one that doesn't necessarily mean much to the share price. Three-month price chart, the stock got an immediate boost after Aug. 31 and then promptly got back to normal.

 

Honeywell describes itself in its 10-K for 2019 as a diversified technology and manufacturing company that "invents and commercializes technologies that address some of the world's most critical challenges around energy, safety, security, air travel, productivity and global urbanization."

 

Further, it states it is committed to becoming one of the world's top software-industrial companies. To that end, it has undergone some transitional events. Since 2016 it has spun off three companies that are no longer considered a fit with the company's new direction.

 

It also has been investing in new growth. As management noted in the 10-K, "In 2019 we deployed capital of $7.8 billion, including capital expenditures, dividends, share repurchases, mergers and acquisitions, and venture investments."

 

 

 

 

The firm operates through four divisions:

 

    Aerospace

    Honeywell Building Technologies

    Performance Materials and Technologies

    Safety and Productivity Solutions

 

Using its innovative strengths, including $1.5 billion spent on research and development last year, it is developing new products that address Covid-19 problems, as well as the Internet of Things and other issues of the day.

 

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