HON
Honeywell International Inc.
Industrials · Conglomerates · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The combination of positive revenue growth but sharply negative earnings growth produced a below-average growth score, dragging down the composite.
- Elevated leverage with a debt-to-equity of 2.09 and interest coverage of 4.1, alongside the severe 2025Q4 quarterly disruption, contributed weak financial health and momentum scores.
- The consistent dividend growth trend supported an above-average dividend score, partially offsetting weaknesses elsewhere, but not enough to lift the total score significantly.
Why Not Higher
- The 17.1% decline in net income and 15.5% drop in diluted EPS in FY2025, combined with the catastrophic 2025Q4 quarterly results, prevented the score from reaching a higher tier.
- The theme factor contributed zero points under the model's current methodology despite two active macro theme assignments, leaving meaningful potential score on the table.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $34,717,000,000 to FY2025's $37,442,000,000, a gain of +7.8%, but net income fell -17.1% from FY2024 to FY2025, and diluted EPS declined -15.5% over the same period.
The model rewarded modest top-line expansion but penalized the significant deterioration in bottom-line results; the combination of positive revenue growth and sharply negative earnings growth produced a below-average composite score.
In FY2025, Honeywell posted a net margin of 12.6%, an operating margin of 14.6%, and a return on assets of 6.4%.
These figures reflect a company generating meaningful profit at both the operating and net levels, though the return on assets suggests the model viewed asset utilization as moderate rather than exceptional, supporting a mid-range profitability score.
In FY2025, Honeywell carried a debt-to-equity ratio of 2.09 and an interest coverage ratio of 4.1, against a total asset base of $73,681,000,000.
The elevated debt-to-equity ratio of 2.09 and a relatively modest interest coverage of 4.1 in FY2025 signal meaningful leverage and limited earnings cushion relative to interest obligations, which the model penalized with a below-midpoint score.
Quarterly revenue was $10,352,000,000 in 2025Q2 and $10,408,000,000 in 2025Q3 before turning sharply negative at -$19,927,000,000 in 2025Q4, then recovering to $9,143,000,000 in 2026Q1; operating income followed a similar pattern, rising from $1,871,000,000 in 2025Q2 to $2,222,000,000 in 2025Q3, collapsing to -$282,000,000 in 2025Q4, and partially recovering to $886,000,000 in 2026Q1.
The severe disruption in 2025Q4 across revenue, net income, and operating income, followed by only a partial recovery in 2026Q1, produced an irregular and negative trend that the model treated as weak momentum despite the earlier sequential improvement through 2025Q3.
Honeywell has grown its dividends per share each year from $3.97 in FY2022 to $4.17 in FY2023, $4.37 in FY2024, and $4.58 in FY2025, while the dividend payout ratio stood at 62.9% of net income in FY2025.
The model rewarded the consistent multi-year dividend growth trend, while the 62.9% payout ratio in FY2025 indicates a substantial but not extreme commitment of earnings to dividends, supporting a above-average dividend score.
Honeywell is assigned to the macro themes of Grid Modernization and Industrial Automation & Robotics.
Although the company carries two active macro theme assignments, this assignment did not translate into score under the model's current methodology for this factor.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Honeywell posted modest top-line growth of 7.8% in FY2025, but net income fell 17.1% and diluted EPS dropped 15.5%, reflecting meaningful bottom-line deterioration despite higher revenues. Profitability metrics remain respectable, with a 12.6% net margin and 14.6% operating margin, though a debt-to-equity ratio of 2.09 and interest coverage of only 4.1 signal elevated financial leverage. Quarterly momentum was severely disrupted in 2025Q4, when revenue and operating income turned sharply negative, with only a partial recovery in 2026Q1. The company's consistent dividend growth from $3.97 in FY2022 to $4.58 in FY2025 provides a measure of income stability, but the overall risk profile warrants a Monitor Only designation.
Plain English
Honeywell is bringing in more sales than last year, but its profits dropped sharply, it carries a lot of debt, and one quarter recently went badly off the rails financially — so while the dividend keeps growing steadily, the stock is one to watch carefully rather than act on right now.
Bull Case vs. Bear Case
Bull Case
- Honeywell has grown its dividend every year from $3.97 in FY2022 to $4.58 in FY2025, demonstrating a consistent commitment to returning cash to shareholders.
- Revenue expanded 7.8% year-over-year from FY2024 to FY2025, showing the company can still grow its top line in a meaningful way.
- Operating and net margins of 14.6% and 12.6% respectively in FY2025 indicate the business continues to generate real profit at both the operating and net levels.
Bear Case
- Net income fell 17.1% and diluted EPS dropped 15.5% from FY2024 to FY2025, signaling that revenue growth is not translating into stronger earnings.
- A debt-to-equity ratio of 2.09 and an interest coverage ratio of just 4.1 in FY2025 reflect elevated leverage and a limited earnings cushion relative to interest obligations.
- The 2025Q4 quarter saw revenue collapse to -$19,927,000,000 and operating income turn negative at -$282,000,000, with only a partial recovery to $9,143,000,000 in revenue and $886,000,000 in operating income in 2026Q1.
What Could Change the Picture
Bullish Triggers
- A sustained return to the sequential revenue and operating income improvement seen from 2025Q2 through 2025Q3 — without another severe quarterly disruption — would signal improving momentum.
- Meaningful reduction in the debt-to-equity ratio or a stronger interest coverage ratio would alleviate concerns about financial leverage and improve the financial health profile.
Bearish Triggers
- If the dividend payout ratio of 62.9% rises further while net income continues to decline, the sustainability of the dividend growth streak could come into question.
- A failure to recover operating income above the 2025Q3 level of $2,222,000,000 on a sustained quarterly basis would confirm that the 2025Q4 disruption has had lasting negative effects.
Risk Profile
High RiskHoneywell's debt-to-equity ratio of 2.09 and interest coverage of only 4.1 in FY2025 indicate the company is carrying substantial leverage with a limited earnings buffer against its interest obligations. This financial vulnerability is compounded by the severe quarterly disruption in 2025Q4, when operating income turned negative at -$282,000,000 and revenue collapsed, with only a partial recovery observed in 2026Q1.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.