In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Honeywell Automation India Limited (NSE:HONAUT) due to its excellent fundamentals in more than one area. HONAUT is a financially-healthy company with a great track record and an optimistic growth outlook. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Honeywell Automation India here.
Flawless balance sheet with outstanding track record
HONAUT delivered a bottom-line expansion of 44% in the prior year, with its most recent earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 21% return to shareholders, which paints a buoyant picture for the company.
HONAUT's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. Investors should not worry about HONAUT’s debt levels because the company has none! This implies that the company is running its operations purely on off equity funding. which is rather impressive for a ₹218b market cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
Next Steps:
For Honeywell Automation India, there are three important aspects you should further research:
-
Valuation: What is HONAUT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether HONAUT is currently mispriced by the market.
-
Dividend Income vs Capital Gains: Does HONAUT return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from HONAUT as an investment.
-
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of HONAUT? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.