Here's Why You Should Hold Honeywell Stock in Your Portfolio Now

Honeywell International Inc. HON is witnessing strength in its commercial aviation aftermarket business, driven by solid demand in the air transport market and supply-chain improvements. After witnessing an increase of 15% in first-quarter 2025, organic sales from its commercial aviation aftermarket business increased 7% year over year in the second quarter.

Strength in its defense and space business, owing to solid U.S. and international defense spending volumes and sustained demand from the current geopolitical climate, has also been proving beneficial. In the first and second quarters, organic sales from its defense and space business surged 10% and 13%, respectively, on a year-over-year basis.

For 2025, it expects organic sales in the Aerospace Technologies segment to be up in the high single digits, driven by continued momentum in both the commercial aviation and defense and space businesses.

The company intends to strengthen and expand its businesses through acquisitions. In August 2025, Honeywell acquired three utility platforms from SparkMeter, Inc. The utility platforms acquired are Praxis for data and analytics, GridScan for tracking grid performance and GridFin for managing energy costs and customer rates. The integration of SparkMeter’s grid intelligence technologies with Honeywell Forge Performance+ for utilities will strengthen its smart energy product portfolio.

Also, HON’s acquisition of Nexceris’ Li-ion Tamer business in July 2025 will enable it to boost its fire life safety portfolio under the Building Automation business and expand its presence across the energy storage and data centers markets. Acquisitions had a contribution of 3% to the company’s sales in the second quarter.

HON remains focused on rewarding its shareholders through dividend payouts and share repurchases. In the first six months of 2025, it paid out dividends of $1.48 billion and repurchased shares worth $3.6 billion.

HON’s Price Performance

In the past year, this Zacks Rank #3 (Hold) company’s shares have gained 5.9% compared with the industry’s 1.8% growth.

However, softness in the productivity solutions and services business, owing to a decrease in license and settlement payments, remains a concern for the Industrial Automation segment. Weakness in the warehouse and workflow solutions and sensing and safety technologies businesses, due to a lower demand environment, has also been affecting the segment's performance. In the second quarter, Honeywell’s Industrial Automation segment’s sales declined 5% year over year.

High debt levels have also been a concern for HON. It exited second-quarter 2025 with a long-term debt of about $30.2 billion, higher than $25.5 billion at 2024-end. The increase in its debt level was primarily attributable to the funds raised for acquisitions. Considering its high debt level, its cash and cash equivalents of $10.3 billion do not look impressive.

Key Picks

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This article originally published on Zacks Investment Research (zacks.com).

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