Head to Head Contrast: Honeywell International (HON) & Icahn Enterprises L.P. (IEP)

Honeywell International (NYSE: HON) and Icahn Enterprises L.P. (NASDAQ:IEP) are both mid-cap multi-sector conglomerates companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.

Profitability

This table compares Honeywell International and Icahn Enterprises L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Honeywell International 12.68% 26.60% 9.75%
Icahn Enterprises L.P. 6.35% 15.51% 4.18%

Risk & Volatility

Honeywell International has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500. Comparatively, Icahn Enterprises L.P. has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500.

Earnings and Valuation

This table compares Honeywell International and Icahn Enterprises L.P.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Honeywell International $39.36 billion 2.77 $7.85 billion $6.45 22.20
Icahn Enterprises L.P. $18.67 billion N/A $1.85 billion $7.85 7.03

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

Analyst Recommendations

This is a summary of recent ratings for Honeywell International and Icahn Enterprises L.P., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Honeywell International 0 1 13 0 2.93
Icahn Enterprises L.P. 0 0 1 0 3.00

Honeywell International presently has a consensus price target of $151.23, indicating a potential upside of 5.62%. Icahn Enterprises L.P. has a consensus price target of $61.00, indicating a potential upside of 10.53%. Given Icahn Enterprises L.P.’s stronger consensus rating and higher probable upside, analysts clearly believe Icahn Enterprises L.P. is more favorable than Honeywell International.

Institutional and Insider Ownership

75.8% of Honeywell International shares are owned by institutional investors. Comparatively, 96.8% of Icahn Enterprises L.P. shares are owned by institutional investors. 1.6% of Honeywell International shares are owned by insiders. Comparatively, 90.1% of Icahn Enterprises L.P. shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Honeywell International pays an annual dividend of $2.66 per share and has a dividend yield of 1.9%. Icahn Enterprises L.P. pays an annual dividend of $3.00 per share and has a dividend yield of 5.4%. Honeywell International pays out 41.2% of its earnings in the form of a dividend. Icahn Enterprises L.P. pays out 38.2% 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 6 consecutive years. Icahn Enterprises L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.

About Honeywell International

Honeywell International Inc. is a technology and manufacturing company. The Company operates through four segments: Aerospace, Home and Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions. The Company’s Aerospace segment supplies products, software and services for aircraft and vehicles that it sells to original equipment manufacturers (OEMs) and other customers. The Home and Building Technologies segment provides products, software, solutions and technologies that help owners of homes stay connected and in control of their comfort, security and energy use. The Performance Materials and Technologies segment is engaged in developing and manufacturing materials, process technologies and automation solutions. The Safety and Productivity Solutions segment is engaged in providing products, software and connected solutions to customers that manage productivity, workplace safety and asset performance.

About Icahn Enterprises L.P.

Icahn Enterprises L.P. (Icahn Enterprises) is a holding company. The Company’s segments include Automotive, Energy, Metals, Railcar, Gaming, Food Packaging, Mining, Real Estate and Home Fashion. The Company’s Investment segment includes various private investment funds. The Company operates its Automotive segment through its ownership in Federal-Mogul Holdings Corporation and IEH Auto Parts Holding LLC. The Company operates Energy segment through its controlling interest in CVR Energy, Inc. It operates its Metals segment through its subsidiary, PSC Metals, Inc. The Company operates its Railcar segment through its ownership interests in American Railcar Industries, Inc. Its Food Packaging segment consists of ownership in Viskase Companies, Inc. The Company’s Real Estate operations consist of rental real estate, property development and associated resorts. It also owns a limited partner interest in Icahn Enterprises Holdings L.P. (Icahn Enterprises Holdings).

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