Updated 3/10/25

Honeywell International Inc. (HON) is one of those steady, blue-chip industrial giants that has been around for what feels like forever. It operates across multiple industries, including aerospace, building technologies, performance materials, and safety solutions. With a market cap hovering around $139 billion, it’s a well-established name that investors tend to trust.

For those who focus on dividends, Honeywell presents an interesting mix. It’s not the highest-yielding stock out there, but it offers reliable income, consistent dividend growth, and financial stability—things that long-term investors appreciate. The question is, does it fit the bill as a strong dividend stock today? Let’s take a closer look.

Key Dividend Metrics

💰 Dividend Yield – 2.11%
📈 5-Year Average Yield – 2.01%
💵 Annual Dividend – $4.52 per share
💳 Payout Ratio – 50.17% (Moderate)
📆 Next Dividend Payment – March 14, 2025
⚠️ Ex-Dividend Date – February 28, 2025
📊 Dividend Growth Streak – Over a decade

Honeywell isn’t going to wow anyone with an ultra-high yield, but for investors who prioritize sustainability and growth, it has a lot to offer.

Dividend Overview

At 2.11%, Honeywell’s dividend yield is right in that middle ground—not too high, not too low. It’s enough to provide steady passive income without raising concerns about whether the company can maintain payouts.

What stands out is Honeywell’s commitment to dividend growth. Over the years, the company has consistently increased its dividend, showing that management values returning cash to shareholders. The current payout ratio sits at 50.17%, which is a comfortable level. This means that about half of its earnings are going toward dividends, leaving enough flexibility for reinvestment and debt management.

For income investors who want a stock that steadily increases its payout without taking on excessive risk, Honeywell fits the profile.

Dividend Growth and Safety

One of the biggest positives with Honeywell is that it isn’t just paying dividends—it’s growing them at a healthy pace.

Recent dividend increases have been in the mid-to-high single-digit range, which is a good balance between rewarding shareholders and keeping the company financially sound.

The five-year compound annual growth rate (CAGR) for the dividend is around 7%, while the 10-year CAGR is closer to 8%. That’s the kind of growth that keeps up with inflation and helps investors maintain their purchasing power over time.

From a safety perspective, there’s a lot to like. The company generates strong free cash flow, which supports ongoing dividend increases. The payout ratio is reasonable, meaning there’s no immediate concern about a dividend cut. And because Honeywell operates across several industries, it isn’t overly reliant on one revenue stream, making it more resilient in economic downturns.

Chart Analysis

The recent price action in Honeywell (HON) offers a lot to unpack, especially for investors watching technical trends. The stock has been through some ups and downs, and it’s currently sitting in an interesting position in relation to key moving averages and trading patterns.

Price Action and Moving Averages

Honeywell’s price has been moving in a volatile but structured manner, with clear support and resistance levels emerging over the past several months. The 50-day moving average (SMA) was acting as support for a good portion of the recent trend but has now turned downward, signaling a shift in momentum. The 200-day moving average (SMA), which is often used to determine longer-term trends, has been more stable and is currently sitting below the stock price.

The most recent price action shows that the stock has rebounded from a lower point and is now hovering just above the 200-day moving average. This suggests that the long-term trend is still intact, but the stock is at a critical point where it needs to either push higher or risk falling below longer-term support.

Volume and Market Participation

Looking at the volume data, there has been a noticeable increase in trading activity during the dips. This is often a sign that buyers are stepping in at lower levels, which can help form a base for future upward moves. However, volume hasn’t been consistently strong on up days, which suggests that while buyers are present, they are not necessarily in full control of the trend.

A few large red volume bars in recent weeks indicate that selling pressure was dominant during some key points, which likely contributed to the stock pulling back from its highs. If volume begins to pick up on green days, that would be a sign that momentum is shifting back in favor of the bulls.

Relative Strength Index (RSI)

The RSI indicator at the bottom of the chart provides another layer of insight. The stock was previously in overbought territory when it reached its peak, and since then, RSI has cooled off significantly. Now, it appears to be stabilizing in a more neutral range, which suggests that the stock is no longer overextended in either direction.

If RSI starts trending higher, it could indicate that bullish momentum is returning. On the other hand, if it stays low or starts dipping further, it might suggest that more downside is possible before the next move higher.

Short-Term Price Action and Candlestick Analysis

The last five candlesticks show a mix of buying and selling pressure, with wicks on both sides of the candles indicating some indecision in the market. However, the most recent candle closed near its high, which is often a positive sign. This suggests that buyers were willing to step in and push the price higher before the close of trading.

Wicks on recent candles also show that the stock has tested lower levels but hasn’t broken down significantly. This type of action can sometimes indicate accumulation, where long-term investors are quietly adding shares at these levels.

If the next few candles continue to push upward with strong closes, that would support a more bullish case. However, if the stock fails to break above recent resistance, it could indicate that another pullback is in store.

Analyst Ratings

Honeywell International Inc. (HON) has recently seen a mix of analyst upgrades and downgrades, reflecting both optimism and caution in the market.

🔼 Upgrades

📈 Deutsche Bank – On February 7, 2025, Deutsche Bank analyst Nicole Deblase upgraded Honeywell from hold to buy, raising the price target from 236 to 260. The upgrade was driven by strong financial performance and growth prospects. Analysts cited Honeywell’s ability to generate steady cash flow and its improving margins as key reasons for the more positive outlook. Additionally, strength in aerospace and automation segments helped reinforce confidence in the company’s long-term potential.

🔽 Downgrades

⚠️ Fitch Ratings – On the same day, Fitch Ratings placed Honeywell’s credit rating on Rating Watch Negative following the company’s announced separation plans. The downgrade was based on uncertainties surrounding how this restructuring might impact Honeywell’s balance sheet and long-term profitability. Analysts pointed out that while the separation could create opportunities, it also introduces potential financial risks, particularly concerning debt levels and operational efficiency during the transition period.

🎯 Consensus Price Target

💰 As of the latest analyst evaluations, Honeywell’s average 12-month price target is approximately 246.20, with forecasts ranging from 210.00 on the low end to 300.00 on the high end.

These contrasting perspectives highlight the different forces shaping Honeywell’s stock, from its operational strengths to the uncertainties surrounding corporate restructuring.

Earnings Report Summary

Honeywell wrapped up the fourth quarter of 2024 on a strong note, with total sales reaching $10.1 billion, a solid 7% increase from the previous year. The growth was mainly fueled by strength in its defense, space, and building solutions businesses. The company’s backlog also hit a record $35.3 billion, climbing 11% year-over-year, signaling strong demand across its various segments.

Earnings per share (EPS) for the quarter came in at $1.96, up 3% from last year. On an adjusted basis, EPS was $2.47, reflecting an 8% decline, but when excluding the impact of an agreement with Bombardier, adjusted EPS actually showed a 9% increase. Operating income saw a healthy 10% jump, with margins improving slightly to 17.3%. While segment profits dipped by 8% to $2.1 billion, the broader picture remains positive when factoring out one-time impacts.

For the full year, Honeywell brought in $38.5 billion in revenue, a 5% increase, with organic growth coming in at 3%. Operating income moved up 5%, and the company managed to maintain stable margins. Full-year EPS landed at $8.71, up 3%, while adjusted EPS climbed to $9.89, representing a 4% year-over-year gain. Again, excluding the Bombardier agreement, adjusted EPS would have risen a solid 9% to $10.34.

Looking ahead to 2025, Honeywell has laid out its expectations, projecting sales between $39.6 billion and $40.6 billion, with organic growth ranging from 2% to 5%. Margins are expected to expand by 60 to 100 basis points, and adjusted EPS is forecasted to land between $10.10 and $10.50, marking a potential increase of up to 6%. The company also anticipates operating cash flow between $6.7 billion and $7.1 billion, with free cash flow expected in the range of $5.4 billion to $5.8 billion.

In a major strategic shift, Honeywell’s Board of Directors has decided to move forward with a plan to separate its Automation and Aerospace businesses, alongside a previously announced spin-off of its Advanced Materials segment. This move will create three independent, publicly traded companies, each with its own focus and growth strategy. Management believes this restructuring will unlock more value for shareholders and allow each business to thrive on its own terms.

All in all, Honeywell’s latest earnings report reflects a company that continues to execute well, with a steady growth trajectory and a clear vision for the future.

Financial Health and Stability

A strong dividend is only as reliable as the company paying it. Honeywell’s financials suggest it’s in a solid position, but there are a few things to watch.

The company is sitting on $10.95 billion in cash, which is a good cushion. On the other side of the balance sheet, it has $32.22 billion in debt. That might seem high, but with steady revenue and cash flow generation, it’s manageable.

Operating cash flow is at $6.1 billion over the past year, and levered free cash flow sits at $4.26 billion. This is a strong position that supports continued dividend payments and potential increases in the future.

One area of concern is the debt-to-equity ratio, which stands at 168.18%. That’s on the higher side, and while Honeywell can comfortably service its debt, it’s something to keep an eye on. Rising interest rates could make borrowing more expensive, which might impact cash flow allocation down the line.

Despite the debt, Honeywell’s margins remain strong, with an operating margin of 18.74%. This shows that the company has solid pricing power and efficient cost management, both of which are important for sustaining long-term profitability.

Valuation and Stock Performance

With a stock price of $213.82, Honeywell isn’t exactly cheap, but it isn’t overly expensive either.

The forward price-to-earnings (P/E) ratio is 20.75, which is reasonable for a company of this quality. It’s not in deep value territory, but it’s also not wildly overvalued. The price-to-earnings-growth (PEG) ratio of 2.28 suggests that growth expectations are moderate, and investors shouldn’t expect explosive stock appreciation in the short term.

Over the past year, Honeywell’s stock has traded between $189.75 and $242.77. Right now, it’s sitting near its 200-day moving average of $213.31. If there’s a pullback, it could create a more attractive entry point for long-term investors looking to lock in a better yield.

For those who prioritize dividend consistency over rapid price appreciation, Honeywell is the type of stock that tends to perform well over long periods, even if short-term price swings occur.

Risks and Considerations

Every stock comes with risks, and Honeywell is no exception. While it’s a solid dividend payer, there are a few things to be aware of.

1️⃣ Economic Cycles – As an industrial company, Honeywell’s revenue is tied to the overall economy. A slowdown in manufacturing or aerospace demand could impact earnings.

2️⃣ Debt Levels – The company’s debt load is worth monitoring. While it’s not a major issue now, higher interest rates could make debt refinancing more expensive in the future.

3️⃣ Slower Growth – Dividend increases have been steady, but they aren’t accelerating. For investors looking for high dividend growth, there might be better options elsewhere.

4️⃣ Competition – Honeywell operates in several competitive industries, which means it needs to keep innovating to maintain its margins and market share.

Final Thoughts

For dividend investors, Honeywell has a lot to like. It’s a well-established company with a strong track record of returning capital to shareholders.

The yield of 2.11% isn’t sky-high, but it’s backed by a steady growth history. The payout ratio is reasonable, cash flow is strong, and the company has proven that it can weather different economic conditions without sacrificing dividends.

There are some risks to consider, especially with its debt levels and economic sensitivity. But overall, Honeywell remains a solid choice for investors who want stable, growing dividends from a diversified industrial leader. It’s the kind of stock that doesn’t demand constant attention but quietly delivers reliable income over time.