Critical Analysis: Honeywell International (NYSE:HON) vs. VALEO/S (NYSE:VLEEY)

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Honeywell International (NYSE:HON) and VALEO/S (OTCMKTS:VLEEY) are both multi-sector conglomerates companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, valuation and dividends.

Analyst Ratings

This is a summary of current ratings and target prices for Honeywell International and VALEO/S, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Honeywell International 0 3 10 1 2.86
VALEO/S 4 1 1 0 1.50

Honeywell International presently has a consensus target price of $184.40, suggesting a potential upside of 9.89%. Given Honeywell International’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Honeywell International is more favorable than VALEO/S.

Dividends

Honeywell International pays an annual dividend of $3.28 per share and has a dividend yield of 2.0%. VALEO/S pays an annual dividend of $0.57 per share and has a dividend yield of 3.4%. Honeywell International pays out 40.9% of its earnings in the form of a dividend. VALEO/S pays out 38.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Honeywell International has raised its dividend for 8 consecutive years. VALEO/S is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Honeywell International and VALEO/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Honeywell International 18.17% 32.02% 10.01%
VALEO/S N/A N/A N/A

Insider & Institutional Ownership

75.8% of Honeywell International shares are held by institutional investors. Comparatively, 0.2% of VALEO/S shares are held by institutional investors. 0.7% of Honeywell International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Honeywell International has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500. Comparatively, VALEO/S has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500.

Valuation and Earnings

This table compares Honeywell International and VALEO/S’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Honeywell International $41.80 billion 2.89 $6.77 billion $8.01 20.96
VALEO/S $22.47 billion 0.36 $644.83 million $1.48 11.23

Honeywell International has higher revenue and earnings than VALEO/S. VALEO/S is trading at a lower price-to-earnings ratio than Honeywell International, indicating that it is currently the more affordable of the two stocks.

Summary

Honeywell International beats VALEO/S on 15 of the 18 factors compared between the two stocks.

Honeywell International Company Profile

Honeywell International Inc. operates as a diversified technology and manufacturing company worldwide. Its Aerospace segment supplies products, software, and services for aircrafts and vehicles. This segment offers auxiliary power units, propulsion engines, integrated avionics, environmental control and electric power systems, engine controls, flight safety, communications, navigation hardware, data and software applications, radar and surveillance systems, aircraft lighting, advanced systems and instruments, satellite and space components, and aircraft wheels and brakes; spare parts; repair, overhaul, and maintenance services; and connected solutions and data services for the aftermarket, as well as provides wireless connectivity and management and technical services. The company's Honeywell Building Technologies segment offers products, software, solutions, and technologies, such as sensors, switches, control systems and instruments for energy management; access control; video surveillance; fire products; remote patient monitoring systems; advanced software applications; and installation, maintenance and upgrades of systems. Its Performance Materials and Technologies segment develops and manufactures process technology products, including catalysts and adsorbents, equipment, and consulting services. The company's Safety and Productivity Solutions segment provides products, software, and connected solutions. Its safety products comprise personal protection equipment, apparel, gear, and footwear; gas detection technology; and cloud-based notification and emergency messaging. This segment's productivity solutions products and services include mobile devices and software; supply chain and warehouse automation equipment, software and solutions; custom-engineered sensors, switches, and controls; and software-based data and asset management productivity solutions. Honeywell International Inc. was incorporated in 1985 and is based in Morris Plains, New Jersey.

VALEO/S Company Profile

Valeo SA designs, produces, and sells components, integrated systems, and modules for the automotive sector worldwide. The company operates through four segments: Comfort & Driving Assistance Systems, Powertrain Systems, Thermal Systems, and Visibility Systems. It offers parking and driving assistance products, such as ultrasonic sensors, radars, and cameras to detect obstacles around vehicles; intuitive control products; and a range of connectivity solutions from short-range to long-range connectivity, as well as develops systems that enable the integration of applications, such as car sharing services and remote parking systems. The company also manufactures powertrain systems, including electric powertrain systems for the electric cars; products that enable the automation of transmissions to reduce fuel consumption and enhance driving comfort; and clean engines for vehicles. In addition, it designs and manufactures systems, modules, and components to optimize thermal management of vehicles and passenger comfort in the cabin. Further, the company designs and produces lighting and wiper systems for drivers in all weather conditions. In addition, it offers original equipment spares to auto manufacturers and the independent aftermarket; replacement parts and accessories for passenger cars and commercial vehicles; air conditioning systems for buses; cabin 3D image processing software; hydraulic actuators; and torque converters. Valeo SA was founded in 1923 and is headquartered in Paris, France.

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