Honeywell (NYSE: HON) is one of the best-run industrial companies in the world. Its pristine balance sheet, exciting growth opportunities, and track record of beating guidance make it a highly attractive company for investors. That said, buying a stock isn’t just about buying a great company — it’s about buying a great price. In that context, let’s take a look at the pros and cons of buying Honeywell stock right now.
On a superficial basis, the company’s valuation is looking a bit stretched. As a rough rule of thumb, industrial conglomerates are seen as being fair value when trading around 20 times their free cash flow (FCF).