Should You Invest in Honeywell?

PHOTO CREDIT: Honeywell

OVERVIEW

Honeywell International Incorporation is a company based in the United States. The company designs, manufactures, and sells a wide variety of industrial goods to consumers around the world. The company offers aerospace, building technologies, performance materials, as well as safety and productivity solutions and products. The company was founded in 1985.

Why You Should?

  1. Honeywell is a great reopening play in an investor’s portfolio. The company saw a drop in demand for most of its products as the pandemic spread around the world. However, once the pandemic comes to an end, the industrial economy will fully reopen for business and the demand for the company’s products will rise once again.
  2. The COVID-19 pandemic also boosted some of the company’s sales. For example, the company saw a sharp increase in demand for N95 masks around the world and also saw strong demand in its medical and healthcare business. These segments were a bright spot in the company’s otherwise bleak financial results over the past year.
  3. A Biden administration will have multiple positive impacts on the company. The company will see strong demand for its infrastructure-related products, like equipment and other products, as Biden looks to spend trillions on physical infrastructures like roads and bridges. Trade deals with other countries will also drive international sales for the company.
  4. Honeywell, like many other industrial giants, offers a good dividend for investors. At the moment, the company offers a dividend of $3.92, or 1.8%, per stock per year. The company has been growing this amount year over year for the past couple of years as well. This will benefit investors who are looking for a good long-term investment option.

Why You Should Not?

  1. Honeywell faces tough competition in the industrial sector. Some of the companies include 3M, Boeing, Raytheon Technologies, and many others. This competition might hurt the company and its investors in the future.
  2. The company saw a drop in demand for many of its products during the pandemic. For example, the company’s building technologies and solutions provided weak results for the company as the construction industry shut down due to weak demand in commercial buildings. The Aerospace sector also hurt the company’s results last year.
  3. Several supply chain issues are hampering the company’s recovery from this pandemic. The company operates a fairly complicated supply chain with suppliers around the world. A shortage of key parts like semiconductors and massive shipping shortages have hurt the company and its investors in the short and mid-term.

MY OPINION

I think that Honeywell is a great long-term investment option due to its position as a good reopening play, positive impacts from the pandemic, positive impacts from the Biden administration, as well as a good dividend offering to investors. However, tough competition, negative impacts from the pandemic, as well as massive supply chain issues might hurt the company and its investors in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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