Honeywell: Industrial Strength

11/20/2013 7:00 am EST


David Fish

Executive Editor, Moneypaper

Most of the "noise" coming out of Wall Street focuses on how high the major indexes have risen and whether the new highs represent a peak, suggesting that a new bear market might ensue, notes David Fish in MoneyPaper.

But that ignores the fact that every market peak has been preceded by a series of new highs, sometimes stretching out over several years.

Investors would be better served by focusing on the fundamental values of the particular stocks that they own.

Strong businesses continue to deliver rising profits (and usually dividends) year after year, despite the hand-wringing and confusion of traders and pundits, who are in the business of making noise.

Meanwhile, for long-term dividend investors, our latest featured recommendation is Honeywell (HON), a global diversified technology and manufacturing company with more than $38 billion in annual sales.

The firm operates in four segments: Aerospace (turbine propulsion engines and environmental control systems); Automation and Control (sensing and security systems); Transportation (turbochargers, electronic components, and other auto products); and Specialty Materials (resins, chemicals, fibers, films, adhesives).

Consensus estimates call for Honeywell to earn about $4.95 per share this year and $5.56 in 2014, compared with $4.48 in 2012, and Value Line projects double-digit growth in earnings, dividends, and book value over the next three to five years.

State Street owns 9.4% and BlackRock owns 5.5% of the 784.8 million shares outstanding, which is down from 862.3 million in 2003. The dividend has been increased in eight of the last nine years and provides a 2.1% yield.

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