Analyzing Honeywell International (NASDAQ:HON) and Griffon (NYSE:GFF)

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honeywell International	1	8	13	0	2.55
Griffon	1	1	2	2	2.83

Honeywell International presently has a consensus target price of $251.83, indicating a potential upside of 8.46%. Griffon has a consensus target price of $107.67, indicating a potential upside of 29.66%. Given Griffon’s stronger consensus rating and higher possible upside, analysts clearly believe Griffon is more favorable than Honeywell International.

Institutional and Insider Ownership

75.9% of Honeywell International shares are owned by institutional investors. Comparatively, 73.2% of Griffon shares are owned by institutional investors. 0.2% of Honeywell International shares are owned by insiders. Comparatively, 10.2% of Griffon shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Honeywell International has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Griffon has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.

Earnings and Valuation

This table compares Honeywell International and Griffon”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Honeywell International	$37.44 billion	3.93	$4.73 billion	$7.99	29.06
Griffon	$2.52 billion	1.53	$51.11 million	$0.92	90.26

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

Profitability

This table compares Honeywell International and Griffon’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%
Griffon	1.76%	228.83%	12.35%

Dividends

Honeywell International pays an annual dividend of $4.76 per share and has a dividend yield of 2.1%. Griffon pays an annual dividend of $0.88 per share and has a dividend yield of 1.1%. Honeywell International pays out 59.6% of its earnings in the form of a dividend. Griffon pays out 95.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Honeywell International has raised its dividend for 14 consecutive years and Griffon has raised its dividend for 1 consecutive years. Honeywell International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Honeywell International beats Griffon on 10 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 Griffon

Griffon Corporation, through its subsidiaries, provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. The company operates through two segments: Home and Building Products, and Consumer and Professional Products. The Home and Building Products segment manufactures and markets residential and commercial sectional garage doors, rolling steel service doors, fire doors, shutters, steel security grilles, and room dividers for the use in commercial construction and repair, and home remodeling applications. The segment also sells related products, such as garage door openers. The Consumer and Professional Products segment manufactures and markets long-handled engineered tools, including spades, hoes, cultivators, weeders, post hole diggers, scrapers, edgers and forks; wheelbarrows and lawn carts; snow tools comprising pushers, roof rakes, sled sleigh shovels, scoops, and ice scrapers; and pruning products, such as pruners, loppers, shears, and other tools. The segment also offers striking tools, including axes, picks, mattocks, mauls, wood splitters, sledgehammers, pry bars, and repair handles; traditional and gardening hand tools comprising hammers, screwdrivers, pliers, adjustable wrenches, handsaws, tape measures, levels, clamps, trowels, cultivators, weeders, and other hand tools; indoor and outdoor planters and lawn accessories; and garden hoses and hose reels. In addition, the segment provides home organization products, including wire and wood shelving, containers, storage cabinets, and other closet and home organization accessories; residential, industrial, and commercial fans; and cleaning products, such as brooms, brushes, squeegees, and other cleaning products. The company was formerly known as Instrument Systems Corporation and changed its name to Griffon Corporation in June 1992. Griffon Corporation was founded in 1774 and is headquartered in New York, New York.