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Promising Growth Prospects for Wide-Moat Honeywell

Shares may be a bit pricey today, but investors should keep this high-quality name on their watchlist.


Joshua Aguilar: The market has historically denied Honeywell a premium multiple, like wide-moat rated 3M. Even so, we think Honeywell is a company that is equally as high-quality as 3M but one with more promising growth prospects. Our new thesis is underpinned by confidence in, first, the firm's culture of independent thinking, which contrasts with that of GE; second, a rigorous process modeled after the Toyota production system; and third, a portfolio with a massive installed base that's becoming increasingly integrated with software.

In terms of Honeywell's portfolio, we're keeping close track of a few business lines, which we think are ultimately going to move the stock going forward. First and foremost, we're most enthused by Honeywell's warehouse automation offerings, which were particularly strengthened by its acquisition of Intelligrated in 2016. 

Joshua Aguilar does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.