Honeywell International (NASDAQ:HON) & Hitachi (OTCMKTS:HTHIY) Financial Analysis

Honeywell International (NASDAQ:HON) and Hitachi (OTCMKTS:HTHIY) are both large-cap multi-sector conglomerates companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Analyst Recommendations

This is a breakdown of current recommendations for Honeywell International and Hitachi, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honeywell International	1	8	12	0	2.52
Hitachi	0	2	0	1	2.67

Honeywell International currently has a consensus price target of $251.65, suggesting a potential upside of 13.58%. Given Honeywell International’s higher possible upside, research analysts clearly believe Honeywell International is more favorable than Hitachi.

Valuation & Earnings

This table compares Honeywell International and Hitachi”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Honeywell International	$37.44 billion	3.76	$4.73 billion	$7.99	27.73
Hitachi	$64.25 billion	2.18	$4.06 billion	$1.48	20.64

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

Dividends

Honeywell International pays an annual dividend of $4.76 per share and has a dividend yield of 2.1%. Hitachi pays an annual dividend of $0.19 per share and has a dividend yield of 0.6%. Honeywell International pays out 59.6% of its earnings in the form of a dividend. Hitachi pays out 12.8% 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 14 consecutive years. Honeywell International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Honeywell International	12.74%	40.64%	8.89%
Hitachi	8.05%	13.27%	5.96%

Volatility & Risk

Honeywell International has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Hitachi has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Insider and Institutional Ownership

75.9% of Honeywell International shares are held by institutional investors. Comparatively, 0.3% of Hitachi shares are held by institutional investors. 0.4% of Honeywell International shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Honeywell International beats Hitachi on 14 of the 18 factors compared between the two stocks.

About Honeywell International

Honeywell International Inc. engages in the aerospace technologies, building automation, energy and sustainable solutions, and industrial automation businesses in the United States, Europe, and internationally. The company’s Aerospace 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 thermal systems, as well as wireless connectivity services. Its Honeywell Building Technologies segment provides software applications for building control and optimization; sensors, switches, control systems, and instruments for energy management; access control; video surveillance; fire products; and installation, maintenance, and upgrades of systems. The company’s Performance Materials and Technologies segment offers automation control, instrumentation, and software and related services; catalysts and adsorbents, equipment, and consulting; and materials to manufacture end products, such as bullet-resistant armor, nylon, computer chips, and pharmaceutical packaging, as well as provides materials based on hydrofluoro-olefin technology. Its Safety and Productivity Solutions segment provides personal protective equipment, apparel, gear, and footwear; gas detection technology; custom-engineered sensors, switches, and controls for sensing and productivity solution; cloud-based notification and emergency messaging; mobile devices and software; custom-engineered sensors, switches, and controls; and data and asset management productivity solutions. Honeywell International Inc. was founded in 1885 and is headquartered in Charlotte, North Carolina.

About Hitachi

Hitachi, Ltd. provides digital system and services, green energy and mobility, and connective industry solutions in Japan and internationally. It operates through seven segments: Digital Systems & Services, Green Energy & Mobility, Connective Industries, Automotive System, Hitachi Construction Machinery, Hitachi Metals, and Others. The company offers system integration, consulting, cloud services, storage, servers, and ATMs; finance solutions, social infrastructure information systems, government and public corporation information system, big data and AI, and IoT and data management; and IT products. It also operates power grids, nuclear and clear energy, renewable energy; provides energy management services and distributed power source solutions; semiconductors; elevators and escalators; air conditioners; industrial equipment; and railway systems. In addition, the company offers medical equipment for radiation therapy, In-vitro diagnosis, and regenerative medicines; automotive systems; home appliances; and water treatment solutions for water supply and sewage infrastructure, industrial water treatment, seawater desalination, and water recycling, as well as maintenance and repair services. Further, it hydraulic excavators, wheel loaders, mining machinery, construction solutions, and mine management systems. Additionally, the company offers specialty steel, functional components and equipment, power electronic and magnetic materials, wires, and cable and related products; optical disk drives; and property management services. Hitachi, Ltd. was founded in 1910 and is headquartered in Tokyo, Japan.