Should you Invest in Honeywell?

OVERVIEW

Honeywell International Incorporation is an industrial conglomerate offering several areas of specialization. Their largest business comes from their Aerospace Sector which offers several parts to make airplanes as well as maintenance for older parts. Their Building Tech sector offers software and hardware for building control. They offer much more. The company was founded in 1985.

Why You Should?

  1. Honeywell offers a wide range of products. From Aerospace to building management software and hardware to other safety equipment, the company will always see some level of demand for its products.
  2. Honeywell has seen benefits from the industrial economy coming back on track after bottoming out because of the pandemic. The company will be benefited from a return in demand for its products.
  3. The COVID-19 Pandemic has boosted the demand for some of Honeywell’s products. Honeywell makes products like personal protective equipment and different patient monitoring equipment. These as well as several other products have gone up in demand since this pandemic started.

Why You Should Not?

  1. The COVID-19 Pandemic has also decelerated demand for some other Honeywell Products. For example, Honeywell’s largest sector is Aerospace. The COVID-19 Pandemic has diminished demand for new aircraft parts and other products and services related to aviation. This will negatively impact the company until demand recovers.
  2. The company reported less revenue and profits in the financial year of 2019. This is because of multiple spinoffs from the company’s several sectors which allowed them to focus on more core products. It won’t see a rise in its financials until the company recovers from these moves and starts making more money off its core products. The graph below shows that the company’s revenues and profits were rising until 2019 when it spun and divested from several of its products. In the financial year of 2019, the company reported around 36.7 billion in revenues and 6.1 billion in profits. Both of these metrics are lower from the financial year of 2018 when the company reported revenues of around 41.8 billion and profits of around 6.8 billion. I am confident that this company will see rising revenues and profits once we go through this pandemic and once it recovers from its several divestments.
PHOTO CREDIT: Yahoo Finance

MY OPINION

In my opinion, I think that Honeywell is a great long-term investment due to its wide range of products as well as the industrial economy picking up steam. However, the COVID-19 Pandemic has decimated the company’s aerospace business. The company still needs to recover from multiple spin-offs and start focusing on its core products.

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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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