Honeywell favored over 3M due to better valuation and growth prospects.

From Nasdaq: 2024-11-25 00:32:15

Honeywell stock (NYSE: HON) is favored over 3M stock (NYSE: MMM) due to better valuation and growth prospects. HON trades at 22x forward earnings compared to MMM’s 18x, with expected outperformance driven by commercial aviation demand. Honeywell has seen higher revenue growth, while 3M faces challenges in various segments. In terms of profitability and financial risk, Honeywell leads in operating margins but 3M has a stronger debt position. Ultimately, Honeywell is considered the better investment choice based on expected revenue growth and valuation. Honeywell stock currently trades at $228, with a forward P/E ratio of 22x, slightly below its historical average of 24x over the past five years. 3M (MMM) stock is currently trading at $128, with a forward P/E ratio of 18x based on expected earnings of $7.28 per share in 2024, slightly higher than its historical average of 16x. The company’s recent actions, including addressing litigations and spinning off its healthcare business, may justify a higher valuation. However, consumer sentiment could impact short-term performance. Meanwhile, Honeywell (HON) is expected to benefit from robust demand in the commercial aviation aftermarket business. In terms of returns, HON has outperformed MMM, with 11% MTD, 11% YTD, and 142% total returns from 2017-2024, compared to MMM’s 0%, 44%, and 13% returns. The S&P 500 had 3%, 24%, and 163% returns in the same periods. Trefis Reinforced Value Portfolio saw 4%, 20%, and 789% returns. For more investment opportunities, check out Trefis Market-Beating Portfolios and Price Estimates. Remember, the views expressed here are the author’s and may not align with Nasdaq, Inc.



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