Honeywell: More Upside Potential


Earnings season is upon us and this gives investors an excellent opportunity to examine the fundamentals of each company. One company that recently reported that I am very interested in owning more of is Honeywell International (HON).

The Company


Honeywell is composed of four segments. Honeywell's Aerospace division manufactures jet propulsion engines, flight management systems and integrated cockpits. The company's products are found on commercial, space and defense aircraft. Examples of Honeywell's products include those that help airplanes run on time, provide for safer flying and assist with fuel efficiency. Once these systems are installed in aircraft, Honeywell provides after-market services. This means that if something needs to be repaired, Honeywell performs the service for customers, thus giving the company a source of revenue that happens on a regular basis. Morningstar estimates that after-market services are so strong that 2/3 of revenue of Aerospace comes from this type of business.


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