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Honeywell vs. 3M: Which Industrial Conglomerate Stock Should You Bet On?
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Key Takeaways
HON's aerospace aftermarket and defense sales grew 7% and 13% year over year in Q2 2025.
MMM saw 2.5% growth in Safety and Industrial and 1% in Transportation and Electronics.
HON's 2025 sales and EPS estimates show 5.7% and 6.3% growth, outpacing MMM's outlook.
Honeywell International Inc. (HON - Free Report) and 3M Company (MMM - Free Report) are two familiar names operating in the Zacks Diversified Operations industry. Both companies compete in multiple industries with significant overlap in the aerospace, consumer goods, industrial automation and safety product markets.
Both companies are poised to benefit from significant growth prospects in the aerospace and industrial sectors, driven by solid momentum in air transport and automation markets. But which company is better positioned to deliver upside in 2025? Let’s compare their fundamentals, growth prospects and challenges to see which stock stands out now.
The Case for Honeywell
The strongest driver of Honeywell’s business at the moment is the commercial aviation aftermarket business. The business is witnessing persistent strength, driven by growth in air transport flight hours, higher shipset deliveries and supply-chain improvements. In the second quarter of 2025, sales from its commercial aviation aftermarket business increased 7% year over year.
Strong momentum in its defense and space business, owing to robust U.S. and international defense spending volumes and sustained demand from the current geopolitical climate, is also driving its performance. In the second quarter, sales from the defense and space business surged 13% year over year.
The company continues to benefit from solid demand for its products and solutions, led by increasing building projects, particularly in North America and the Middle East. Increasing order rates in data centers, airports and hospitality projects bode well for the Building Automation segment.
The segment’s organic sales increased 8% year over year in the second quarter. Within the segment, sales from the building products business grew 9% with strength across fire, security and building management systems. Sales from the building solutions business also improved 5% led by growth in the Middle East region.
Also, strength in the Universal Oil Products business, driven by higher refining and petrochemicals projects, bodes well for the Energy and Sustainability Solutions segment. For 2025, it expects overall revenues to be in the $40.8-$41.3 billion range, with organic revenues expected to be up 4-5% on a year-over-year basis.
HON’s commitment to rewarding its shareholders through dividends and share buybacks is also encouraging. It paid out dividends worth $1.48 billion and repurchased shares worth $3.6 billion in the first six months of 2025.
However, continued weakness in the productivity solutions and services business, owing to project slowdown, remains a concern for the Industrial Automation segment. In second-quarter 2025, the segment’s sales declined 5% on a year-over-year basis. For 2025, it anticipates the Industrial Automation segment’s organic sales to decline in the low to mid-single digit range.
Honeywell exited the second quarter with long-term debt of $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.
The Case for 3M
3M has been witnessing solid momentum in the Safety and Industrial segment, driven by strength in personal safety, roofing granules, industrial adhesives and tapes, abrasives and electrical markets. Stable demand for electrical infrastructure products like medium voltage cable accessories and insulation tapes augurs well for the segment. Also, an increase in demand for industrial and electronics bonding solutions bodes well for it. The segment’s organic sales improved 2.5% year over year in the first six months of 2025.
The company’s Transportation and Electronics segment has been benefiting from strength in the transportation and aerospace end markets. Solid momentum in the electronics, aerospace and defense, personal auto and commercial graphics markets, driven by demand for new products and expanding sales coverage, is proving beneficial for the segment. The segment’s adjusted organic revenues grew 1% in the second quarter. For 2025, MMM expects total adjusted organic sales to grow 2% on a year-over-year basis.
3M’s structural reorganization actions are expected to reduce the size of its corporate center, streamline its geographic footprint, simplify the supply chain and optimize manufacturing roles to align with production volumes. It expects these actions to be completed by 2025 and yield annual pre-tax savings.
MMM remains committed to increasing its shareholders’ wealth through dividend payouts and share buybacks. In the first six months of 2025, it used $786 million in paying out dividends and $2.2 billion in buybacks. In February 2025, 3M authorized a new share repurchase program of up to $7.5 billion, replacing its previous program.
However, weak demand in the consumer retail end markets, owing to subdued consumer discretionary spending, remains a concern. There has been a particular weakness in its packaging expression business. Also, softness in the automotive OEM business, due to reduced auto build rates, particularly in Europe and the US, is concerning for 3M.
Exiting second-quarter 2025, 3M’s long-term debt totaled $12.5 billion, reflecting an increase of 1.6% sequentially. Its short-term borrowings and current portion of long-term debt were high at $669 million. Given the high debt level, its cash and cash equivalents totaled $3.7 billion.
3M has also been involved in several litigations, including earplug lawsuits. It has dedicated substantial funds to resolving these disputes, as ongoing litigation might lead to additional expenses.
The Zacks Consensus Estimate for HON & MMM
The Zacks Consensus Estimate for HON’s 2025 sales and earnings per share (EPS) implies year-over-year growth of 5.7% and 6.3%, respectively. Honeywell’s EPS estimates for both 2025 and 2026 have increased over the past 60 days.
Image Source: Zacks Investment Research
While the Zacks Consensus Estimate for MMM’s 2025 sales implies a year-over-year decline of 8.8%, the same for its EPS indicates growth of 8.5%. The EPS estimates for both 2025 and 2026 have been raised over the past 60 days.
Image Source: Zacks Investment Research
Price Performance and Valuation of MMM & HON
In the past six months, Honeywell shares have gained 3.4%, while 3M stock has gained 6.4%.
Image Source: Zacks Investment Research
3M is trading at a forward 12-month price-to-earnings ratio of 18.89X, above its median of 12.15X over the last three years. Honeywell’s forward earnings multiple sits at 19.61X, close to its median of 20.11X over the same time frame.
3M’s solid momentum in the safety, industrial and transportation markets has been dented by the persistent softness in the consumer retail market. The legal battle surrounding its earplug lawsuits has created a bearish sentiment around the stock.
In contrast, Honeywell’s diversified portfolio, growth investments and strong dealer network provide it with a competitive advantage to leverage the long-term demand prospects in the aerospace and industrial markets. Despite its steeper valuation, HON seems to be a better pick due to strong estimates and better prospects for sales and profit growth.
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Honeywell vs. 3M: Which Industrial Conglomerate Stock Should You Bet On?
Key Takeaways
Honeywell International Inc. (HON - Free Report) and 3M Company (MMM - Free Report) are two familiar names operating in the Zacks Diversified Operations industry. Both companies compete in multiple industries with significant overlap in the aerospace, consumer goods, industrial automation and safety product markets.
Both companies are poised to benefit from significant growth prospects in the aerospace and industrial sectors, driven by solid momentum in air transport and automation markets. But which company is better positioned to deliver upside in 2025? Let’s compare their fundamentals, growth prospects and challenges to see which stock stands out now.
The Case for Honeywell
The strongest driver of Honeywell’s business at the moment is the commercial aviation aftermarket business. The business is witnessing persistent strength, driven by growth in air transport flight hours, higher shipset deliveries and supply-chain improvements. In the second quarter of 2025, sales from its commercial aviation aftermarket business increased 7% year over year.
Strong momentum in its defense and space business, owing to robust U.S. and international defense spending volumes and sustained demand from the current geopolitical climate, is also driving its performance. In the second quarter, sales from the defense and space business surged 13% year over year.
The company continues to benefit from solid demand for its products and solutions, led by increasing building projects, particularly in North America and the Middle East. Increasing order rates in data centers, airports and hospitality projects bode well for the Building Automation segment.
The segment’s organic sales increased 8% year over year in the second quarter. Within the segment, sales from the building products business grew 9% with strength across fire, security and building management systems. Sales from the building solutions business also improved 5% led by growth in the Middle East region.
Also, strength in the Universal Oil Products business, driven by higher refining and petrochemicals projects, bodes well for the Energy and Sustainability Solutions segment. For 2025, it expects overall revenues to be in the $40.8-$41.3 billion range, with organic revenues expected to be up 4-5% on a year-over-year basis.
HON’s commitment to rewarding its shareholders through dividends and share buybacks is also encouraging. It paid out dividends worth $1.48 billion and repurchased shares worth $3.6 billion in the first six months of 2025.
However, continued weakness in the productivity solutions and services business, owing to project slowdown, remains a concern for the Industrial Automation segment. In second-quarter 2025, the segment’s sales declined 5% on a year-over-year basis. For 2025, it anticipates the Industrial Automation segment’s organic sales to decline in the low to mid-single digit range.
Honeywell exited the second quarter with long-term debt of $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.
The Case for 3M
3M has been witnessing solid momentum in the Safety and Industrial segment, driven by strength in personal safety, roofing granules, industrial adhesives and tapes, abrasives and electrical markets. Stable demand for electrical infrastructure products like medium voltage cable accessories and insulation tapes augurs well for the segment. Also, an increase in demand for industrial and electronics bonding solutions bodes well for it. The segment’s organic sales improved 2.5% year over year in the first six months of 2025.
The company’s Transportation and Electronics segment has been benefiting from strength in the transportation and aerospace end markets. Solid momentum in the electronics, aerospace and defense, personal auto and commercial graphics markets, driven by demand for new products and expanding sales coverage, is proving beneficial for the segment. The segment’s adjusted organic revenues grew 1% in the second quarter. For 2025, MMM expects total adjusted organic sales to grow 2% on a year-over-year basis.
3M’s structural reorganization actions are expected to reduce the size of its corporate center, streamline its geographic footprint, simplify the supply chain and optimize manufacturing roles to align with production volumes. It expects these actions to be completed by 2025 and yield annual pre-tax savings.
MMM remains committed to increasing its shareholders’ wealth through dividend payouts and share buybacks. In the first six months of 2025, it used $786 million in paying out dividends and $2.2 billion in buybacks. In February 2025, 3M authorized a new share repurchase program of up to $7.5 billion, replacing its previous program.
However, weak demand in the consumer retail end markets, owing to subdued consumer discretionary spending, remains a concern. There has been a particular weakness in its packaging expression business. Also, softness in the automotive OEM business, due to reduced auto build rates, particularly in Europe and the US, is concerning for 3M.
Exiting second-quarter 2025, 3M’s long-term debt totaled $12.5 billion, reflecting an increase of 1.6% sequentially. Its short-term borrowings and current portion of long-term debt were high at $669 million. Given the high debt level, its cash and cash equivalents totaled $3.7 billion.
3M has also been involved in several litigations, including earplug lawsuits. It has dedicated substantial funds to resolving these disputes, as ongoing litigation might lead to additional expenses.
The Zacks Consensus Estimate for HON & MMM
The Zacks Consensus Estimate for HON’s 2025 sales and earnings per share (EPS) implies year-over-year growth of 5.7% and 6.3%, respectively. Honeywell’s EPS estimates for both 2025 and 2026 have increased over the past 60 days.
Image Source: Zacks Investment Research
While the Zacks Consensus Estimate for MMM’s 2025 sales implies a year-over-year decline of 8.8%, the same for its EPS indicates growth of 8.5%. The EPS estimates for both 2025 and 2026 have been raised over the past 60 days.
Image Source: Zacks Investment Research
Price Performance and Valuation of MMM & HON
In the past six months, Honeywell shares have gained 3.4%, while 3M stock has gained 6.4%.
Image Source: Zacks Investment Research
3M is trading at a forward 12-month price-to-earnings ratio of 18.89X, above its median of 12.15X over the last three years. Honeywell’s forward earnings multiple sits at 19.61X, close to its median of 20.11X over the same time frame.
Image Source: Zacks Investment Research
Final Take on HON & MMM
Honeywell and 3M have a Zacks Rank #3 (Hold) each, which makes choosing one stock a difficult task. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3M’s solid momentum in the safety, industrial and transportation markets has been dented by the persistent softness in the consumer retail market. The legal battle surrounding its earplug lawsuits has created a bearish sentiment around the stock.
In contrast, Honeywell’s diversified portfolio, growth investments and strong dealer network provide it with a competitive advantage to leverage the long-term demand prospects in the aerospace and industrial markets. Despite its steeper valuation, HON seems to be a better pick due to strong estimates and better prospects for sales and profit growth.