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HON, Honeywell International Inc.

Aerospace & Defense capital-intensive Serial acquirer

Honeywell is a diversified industrial company that sells both equipment and the work to keep it running. Its products include aircraft engines, cockpit avionics and auxiliary power units sold to plane makers and airlines; control systems and software that run buildings and factories; specialty chemicals and materials; and safety and automation gear such as sensors and scanners for manufacturers and warehouses. It makes money twice: once on the original sale, and again servicing the installed base — parts, repairs and upgrades — over the long life of the gear.

Latest annual: FY2025 10-K

HON · Honeywell International Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$37.4B

+7.8% YoY · 3% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $37.7B 5-yr avg $35.0B

Gross margin 37% 5-yr avg 37%

Operating margin 21.9% 5-yr avg 22.2%

ROIC 21% 5-yr avg 23%

Owner-earnings margin 11% 5-yr avg 14%

Free cash flow margin 11% 5-yr avg 14%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Products (65%) and Services (35%).
Situation: Serial acquirer. Goodwill and acquired intangibles are 38% of assets, with meaningful acquisition spending in 5 of the record's 10 years; much of what this business is was bought, at prices the record carries.
What moves the needle: The lever is whether the installed base is a toll bridge. Once a Honeywell engine or control system is certified into an aircraft or designed into a plant, the question is whether the owner is bound to come back to Honeywell for parts and service for years — and the test of that franchise is whether the service half earns a real margin without price resistance, and whether each separate business clears its own cost of capital rather than leaning on a strong sibling. The bad case is plain: this is a capital-heavy conglomerate carrying net debt, several of its units sell into aerospace and industrial cycles it does not control, and a company stitched from many parts can hide a weak one behind a good one. Watch the margins and returns below for whether the money is in the aftermath of the sale, not the sale itself.
Is it a good business?: Return on capital has run high across the record (median 23%, above 15% in 10 of 10 years). Owner earnings agree: roughly 14% of revenue reaches owners as cash, consistently. Whether these returns reflect real pricing power or an accounting artifact is the judgment the 10-K is for.

Drafted from the company's filings and reviewed by hand; every number is shown in full in the sections below.

Where the money comes from

read the 10-K →

Products is 65% of revenue, with Services the other meaningful line at 35%.

Revenue by product line, FY2025

Products65%$24.5B
Services35%$12.9B

By geographyUnited States58%Europe22%Other international20%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$39.3B	$40.5B	$41.8B	$36.7B	$32.6B	$34.4B	$35.5B	$33.0B	$34.7B	$37.4B	$37.7B	RevenueRevenue
30%	31%	31%	34%	32%	36%	37%	37%	38%	37%	37%	Gross marginGross mgn
14%	15%	14%	15%	15%	14%	15%	15%	15%	15%	14%	SG&A / revenueSG&A/rev
5%	5%	4%	4%	4%	4%	4%	4%	4%	5%	5%	R&D / revenueR&D/rev
$6.8B	$7.2B	$7.8B	$7.8B	$6.3B	$7.5B	$8.0B	$7.6B	$7.7B	$8.1B	$8.3B	Operating incomeOp. inc.
17.2%	17.8%	18.6%	21.3%	19.3%	21.8%	22.6%	22.9%	22.1%	21.7%	21.9%	Operating marginOp. mgn
$4.8B	$1.5B	$6.8B	$6.1B	$4.8B	$5.5B	$5.0B	$5.7B	$5.7B	$4.7B	$4.1B	Net incomeNet inc.
25%	—	9%	18%	19%	23%	22%	18%	18%	18%	15%	Effective tax rateTax rate
											Cash flow & returns
$5.5B	$6.0B	$6.4B	$6.9B	$6.2B	$6.0B	$5.3B	$5.3B	$6.1B	$6.4B	$5.2B	Operating cash flowOp. cash
$1.0B	$1.1B	$1.1B	$1.1B	$1.0B	$1.1B	$1.2B	$1.0B	$1.2B	$1.4B	$1.4B	DepreciationDeprec.
($528M)	$3.1B	($1.6B)	($487M)	$258M	($859M)	($1.1B)	($1.5B)	($950M)	$95M	($554M)	Working capital & otherWC & other
$1.1B	$1.0B	$828M	$839M	$906M	$895M	$766M	$741M	$871M	$986M	$1.0B	CapexCapex
2.8%	2.5%	2.0%	2.3%	2.8%	2.6%	2.2%	2.2%	2.5%	2.6%	2.7%	Capex / revenueCapex/rev
$4.4B	$4.9B	$5.6B	$6.1B	$5.3B	$5.1B	$4.5B	$4.6B	$5.2B	$5.4B	$4.1B	Owner earningsOwner earn.
11.2%	12.2%	13.4%	16.5%	16.2%	15.0%	12.7%	13.9%	15.1%	14.5%	11.0%	Owner earnings marginOE mgn
$4.4B	$4.9B	$5.6B	$6.1B	$5.3B	$5.1B	$4.5B	$4.6B	$5.2B	$5.4B	$4.1B	Free cash flowFCF
11.2%	12.2%	13.4%	16.5%	16.2%	15.0%	12.7%	13.9%	15.1%	14.5%	11.0%	Free cash flow marginFCF mgn
$2.6B	$82M	$535M	$50M	$261M	$1.3B	$178M	$718M	$8.9B	$2.2B	$2.2B	AcquisitionsAcquis.
$1.9B	$2.1B	$2.3B	$2.4B	$2.6B	$2.6B	$2.7B	$2.9B	$2.9B	$3.0B	$3.0B	Dividends paidDiv. paid
$2.1B	$2.9B	$4.0B	$4.4B	$3.7B	$3.4B	$4.2B	$3.7B	$1.7B	$3.8B	—	BuybacksBuybacks
21%	15%	33%	29%	23%	25%	26%	24%	17%	22%	21%	ROICROIC
25%	9%	37%	33%	27%	30%	30%	36%	31%	34%	30%	Return on equityROE
15%	−3%	25%	20%	12%	16%	13%	18%	15%	13%	8%	Retained to equityRetained/eq
											Balance sheet
$9.4B	$10.8B	$10.9B	$10.4B	$15.2B	$11.5B	$10.1B	$8.1B	$10.3B	$12.9B	$12.4B	Cash & investmentsCash+inv
$8.2B	$8.9B	$7.5B	$7.5B	$6.8B	$6.8B	$7.4B	$7.5B	$7.2B	$7.6B	$8.1B	ReceivablesReceiv.
$4.4B	$4.6B	$4.3B	$4.4B	$4.5B	$5.1B	$5.5B	$6.2B	$5.9B	$6.2B	$6.4B	InventoryInvent.
$5.7B	$6.6B	$5.6B	$5.7B	$5.8B	$6.5B	$6.3B	$6.8B	$6.1B	$6.3B	$6.0B	Accounts payablePayables
$6.9B	$6.9B	$6.2B	$6.2B	$5.6B	$5.5B	$6.6B	$6.9B	$7.0B	$7.5B	$8.4B	Operating working capitalOper. WC
$23.1B	$26.0B	$24.4B	$24.3B	$28.2B	$25.4B	$25.0B	$23.5B	$27.9B	$30.4B	$30.6B	Current assetsCur. assets
$16.3B	$18.9B	$18.9B	$18.1B	$19.2B	$19.5B	$19.9B	$18.5B	$21.3B	$23.4B	$22.1B	Current liabilitiesCur. liab.
1.4×	1.4×	1.3×	1.3×	1.5×	1.3×	1.3×	1.3×	1.3×	1.3×	1.4×	Current ratioCurr. ratio
$17.7B	$18.3B	$15.5B	$15.6B	$16.1B	$17.8B	$17.5B	$17.2B	$21.0B	$21.1B	$21.1B	GoodwillGoodwill
$54.6B	$59.5B	$57.8B	$58.7B	$64.6B	$64.5B	$62.3B	$61.5B	$75.2B	$73.7B	$74.0B	Total assetsAssets
$12.4B	$13.9B	$12.6B	$12.5B	$18.8B	$16.1B	$16.9B	$18.4B	$27.3B	$29.0B	$32.1B	Total debtDebt
$3.0B	$3.1B	$1.7B	$2.1B	$3.6B	$4.5B	$6.7B	$10.3B	$17.0B	$16.1B	$19.7B	Net debt / (cash)Net debt
20.0×	22.9×	21.2×	21.9×	17.5×	21.9×	19.4×	10.1×	7.3×	6.0×	5.8×	Interest coverageInt. cov.
$19.4B	$16.5B	$18.2B	$18.5B	$17.5B	$18.6B	$16.7B	$15.9B	$18.6B	$13.9B	$13.6B	Shareholders’ equityEquity
0.5%	0.4%	0.4%	0.4%	0.5%	0.6%	0.5%	0.6%	0.5%	0.5%	0.5%	Stock comp / revenueSBC/rev
											Per share
775M	772M	753M	730M	711M	700M	683M	668M	655M	643M	638M	Shares out (diluted)Shares
$50.69	$52.50	$55.51	$50.27	$45.89	$49.10	$51.92	$49.40	$52.98	$58.25	$58.99	Revenue / shareRev/sh
$6.21	$2.00	$8.98	$8.41	$6.72	$7.91	$7.27	$8.47	$8.71	$7.36	$6.42	EPS (diluted)EPS
$5.68	$6.39	$7.44	$8.30	$7.46	$7.34	$6.60	$6.88	$7.97	$8.43	$6.49	Owner earnings / shareOE/sh
$5.68	$6.39	$7.44	$8.30	$7.46	$7.34	$6.60	$6.88	$7.97	$8.43	$6.49	Free cash flow / shareFCF/sh
$2.47	$2.74	$3.02	$3.34	$3.64	$3.75	$3.98	$4.27	$4.43	$4.63	$4.74	Dividends / shareDiv/sh
$1.41	$1.34	$1.10	$1.15	$1.27	$1.28	$1.12	$1.11	$1.33	$1.53	$1.60	Cap. spending / shareCapex/sh
$24.98	$21.37	$24.14	$25.32	$24.68	$26.51	$24.44	$23.73	$28.41	$21.63	$21.29	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+1.6%/yr	+4.9%/yr
Owner earnings / share	+4.5%/yr	+2.5%/yr
EPS	+1.9%/yr	+1.8%/yr
Dividends / share	+7.2%/yr	+4.9%/yr
Capital spending / share	+0.9%/yr	+3.8%/yr
Book value / share	−1.6%/yr	−2.6%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

643Mpeak FY2016

ROIC

22%low FY2017

Gross margin

37%low FY2016

Net debt ÷ owner earnings

3.0×peak FY2024

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$5.4Bowner earningsvs.$4.7Bnet incomelow FY2016

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned $4.7B of profit into $5.4B of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$4.7B

Owner earnings$5.4B · 14% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$4.7B	$5.7B	$5.7B	$5.0B	$5.5B
Depreciation & amortizationnon-cash charge added back	+$1.4B	+$1.2B	+$1.0B	+$1.2B	+$1.1B
Stock-based compensationreal costnon-cash, but a real cost	+$196M	+$189M	+$197M	+$188M	+$217M
Working capital & othertiming of cash in and out, other non-cash items	+$95M	−$950M	−$1.5B	−$1.1B	−$859M
Cash from operations	$6.4B	$6.1B	$5.3B	$5.3B	$6.0B
Capital expenditurecash put back in to keep running and to grow	−$986M	−$871M	−$741M	−$766M	−$895M
Owner earnings	$5.4B	$5.2B	$4.6B	$4.5B	$5.1B
Owner-earnings marginowner earnings ÷ revenue	14%	15%	14%	13%	15%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $196M), owner earnings is nearer $5.2B.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 6.0×

Comfortable

Operating income $8.1B ÷ interest expense $1.3B

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $16.1B · 2.0× operating profit

Modest net debt

Cash $12.5B + ST investments $443M − debt $29.0B

What this means
Netting $12.9B of cash and short-term investments against $29.0B of debt leaves $16.1B owed, about 2.0× a year's operating profit (3.6× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 72d

Long (60+ days)

DSO 74 + DIO 95 − DPO 98 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 23%

High through the cycle

10-yr median, range 15%–33%; 22% latest = NOPAT $6.7B ÷ invested capital $30.5B

Industry peers: median 11%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 22% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 14%

Solid through the cycle

10-yr median margin, range 11%–17%; latest $5.4B = operating cash $6.4B − maintenance capex $986M

Industry peers: median 5%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 14% of revenue this year, a 14% median across 10 years. Treating stock comp as the real expense it is (less $196M of SBC) leaves $5.2B.
Are earnings backed by cash? 1.36×

Cash-backed

Cash from ops $6.4B ÷ net income $4.7B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 125%

Returned more than it generated

Dividends + buybacks $6.8B ÷ Owner Earnings $5.4B

What this means
The company returned more than it generated: against $5.4B of Owner Earnings, $6.8B (125%) went back to shareholders, $3.0B dividends, $3.8B buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $196M stock comp, the real buyback was about $3.6B. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 0.71×

Harvesting

Capex $986M ÷ depreciation $1.4B

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 3 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $37.4B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.30×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $29.0B vs $7.0B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Near

Earnings +33% over the record · +23%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $8.47/share (latest year $7.46), the averaged base the calculator's gate runs on, and book value is $21.94/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 10 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 18% → 22% (3-yr avg ends)

In the filing’s words The record and the words agree: the margin widened and the filing attributes the gain to its own pricing, not volume alone.

What this means
Through the cycle the operating margin widened — about 18% early to 22% lately, median 21% — pricing power intact or improving.
Reinvestment, incremental ROIC 14%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Owner earnings growth +1%/yr

What this means
Owner earnings grew about 1% a year over the record.
Worst year 2016 · 17.2% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −2.1%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.
How management talks about it Promotional

What this means
Results have held roughly flat while the filing leans on a promoter’s vocabulary — watch whether the words are doing work the numbers are not.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing Raised, but not as a competitor

The filing raises AI among its risks, but in other terms (security, regulation, energy or the like), not as a competitor to its product; it frames AI mainly as a capability.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$30.6B

Cash & short-term investments$12.4B
Receivables$8.1B
Inventory$6.4B
Other current assets$3.8B

Current liabilities$22.1B

Accounts payable$6.0B
Other current liabilities$16.1B

Current ratio1.39×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.10×stricter: inventory excluded

Cash ratio0.56×strictest: cash alone against what's due

Working capital$8.5Bthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago+2.4%the freshest read on whether the business is still growing

Current ratio, recent quarters1.2× → 1.4×

Deeper floors

Tangible book value($14.1B)equity stripped of goodwill & intangibles

Debt incl. operating leases$33.1B$1.0B of it operating leases

Deferred revenue$5.0Bcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'27$6.7B

'28$1.6B

'29$2.0B

'30$2.8B

later$14.3B

Bars scaled to the largest single year; “later” is everything due after 2030, shown apart since it dwarfs the years.

Due in the next 12 months$6.7Bthe first rung: what must be repaid or rolled over within the year

Within two years$8.3Bthe near wall, the part most exposed to today’s credit conditions

Biggest single year$6.7Bin 2027the lumpiest maturity, where a refinancing, if needed, is largest

Total scheduled principal$27.5Bevery year plus what lies beyond, as the footnote totals it

Against what the business has and earns

Cash & short-term investments, Mar 31, 2026$12.4B

One year of owner earnings (FY2025)$5.4B

Together, against $6.7B due next year2.6×

Cash on hand as of Mar 31, 2026 plus a year’s owner earnings comes to $17.8B against the $6.7B due in the twelve months after the Dec 31, 2025 schedule: 2.6 times it.

Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the balance-sheet debt.

How the cash was used, 2016–2025

Over the record, the business generated $60.2B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$9.0B · 15%
Dividends$25.4B · 42%
Buybacks$33.8B · 56%

Returned to owners$59.3B
116% of the owner earnings the business produced over the span, $25.4B as dividends and $33.8B as buybacks.
Source of funding−$8.1B
Reinvestment and shareholder returns ran $8.1B beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $12.4B to $32.1B.
Average price paid for buybacks$167.14
Across the years where the filing reports a share count, 160M shares were bought for $26.7B, about $167.14 each. Year to year the price paid ranged from $107.72 (2016) to $210.17 (2025); its heaviest year, 2019, paid $166.04 ($4.4B).
Net change in share count−17.7%
The diluted count fell from 775M to 638M, so the buybacks outran the stock issued to staff.
Dividend record$4.63/sh
Paid in 10 of the years on record, the per-share dividend growing about 7% a year. It was never cut over the span.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$27.8B38% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equityexceeds itgoodwill alone is larger than the company’s entire book equity; stripped of the acquisition premium, there is no net book worth

Cash spent acquiring$16.8Bover 10 years buying other businesses, against $9.0B of capital spent building

$724M written down across 1 year (2025): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Darius Adamczyk	$26.1M	$15.7M	$5.1B
2022	Darius Adamczyk	$25.4M	$36.7M	$4.5B
2023	Darius Adamczyk	$23.0M	$21.5M	$4.6B
2023	Vimal Kapur	$14.4M	$14.8M	$4.6B
2024	Vimal Kapur	$18.3M	$21.6M	$5.2B
2025	Vimal Kapur	$20.4M	$10.9M	$5.4B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

CEO pay ratio239:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$196M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 2% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Honeywell International Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

1 of the 6 tests turned up something to look into; the other 5 came back clean.

Look hereDid debt outgrow the business?$12.4B → $32.1B
Debt rose from $12.4B to $32.1B while owner earnings went from about $5.0B to $5.1B — about 2.5 years of owner earnings in debt then, about 6.3 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did reported profit become cash?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Aerospace & Defense

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
BABoeing Company (The)	$89.5B	6%	-1.8%	-8%	1%
RTXRTX Corporation	$88.6B	65%	8.2%	5%	8%
GDGeneral Dynamics Corporation	$52.5B	19%	10.9%	14%	8%
HONHoneywell International Inc.	$37.4B	35%	21.5%	23%	14%
PCARPACCAR Inc.	$28.4B	21%	11.6%	23%	11%
LEALear Corporation	$23.3B	7%	3.9%	11%	3%
TXTTextron	$14.8B	17%	7.8%	16%	5%
SAROStandardAero Inc.	$6.1B	14%	7.5%	9%	-0%
Group median	—	18%	8.0%	12%	6%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Honeywell International Inc. has delivered.

Today’s price $

Through the cycle, Honeywell International Inc. earns about $5.3B on its 14.2% median owner-earnings margin. This year’s 14.5% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($5.3B) Net of stock comp (−$194M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+2%/yr

Owner-earnings growth · ’16→’25+1%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $4.1B on 634M shares outstanding, per the 10-Q cover, as of 2026-03-31; net debt $19.7B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh HON against another business →

The owners of HON: the meeting and the votes →

Cite: Owner Scorecard, "Honeywell International Inc. (HON), the owner's record," https://ownerscorecard.com/c/HON, data as of 2026-07-09.

Manual order: ← HOMB its page in the Manual HOOD →

Industry order: ← HII the Aerospace & Defense chapter HWM →