Back to top

Image: Bigstock

Honeywell (HON) Wins 32nd Oleflex Technology Deal in China

Read MoreHide Full Article

Honeywell International Inc. (HON - Free Report) recently announced that its unit, Honeywell UOP's C3 Oleflex propane dehydrogenation (PDH) technology has been selected by Shandong Tianhong Chemical Co., Ltd for the production of 250,000 metric tons of polymer-grade propylene per year at its Dongying facility.

Per the contract, Honeywell will be responsible for providing licensing, process design package, on-site operator training, proprietary and non-proprietary equipment as well as key catalysts and adsorbents to Shandong Tianhong Chemical. Notably, this project marks the company’s 32nd award for Oleflex technology in China.

This apart, the company unveiled a connected portable gas detector, Honeywell BW Ultra, to ensure the safety of its workers in confined spaces. The new detector, which features Honeywell TouchConnect technology, is capable of monitoring up to five different gases at the same time that includes volatile organic compounds. Leveraging Bluetooth connectivity, the Honeywell BW Ultra enables safety managers to monitor valuable data as well.

Our Take

Honeywell is well-positioned to gain from long-term expansion in the markets like aerospace, facility automation and automotive turbochargers owing to its strong market share and product line-up. Also, the company’s continuous focus on investment in innovative technologies is likely to help Honeywell maintain its leadership position. The company is building a robust pipeline of new products too.

Further, the demand for Honeywell's construction, automobiles and airplanes products are expected to grow backed by expansion of emerging markets. In the past three months, this Zacks Rank #3 (Hold) company’s shares have returned 0.6% against the industry’s decline of 3.3%.

Honeywell’s diversified business portfolio also helps it to earn consistent above-average returns and mitigate operating risks. Moreover, the company’s balanced mix of long- and short-cycle businesses along with decent organic growth in new products and expansion in high-growth regions bode well on a long-term perspective. With a flexible yet disciplined focus on cost and productivity, Honeywell remains focused on increasing its presence in high-growth regions.

However, the company is susceptible to material price inflation, which in turn, affects profitability. Also, the company remains highly dependent on its supply chain to scale up production and adjust delivery of long-lead time products during times of volatile demand.

Key Picks

Some better-ranked stocks from the same space are Danaher Corp. (DHR - Free Report) , Crane Company (CR - Free Report) and Federal Signal Corp. (FSS - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Danaher surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 4.1%.

Crane outpaced estimates in the preceding four quarters, with an average earnings surprise of 2.1%.

Federal Signal exceeded estimates in the trailing four quarters, with an average positive earnings surprise of 16.1%.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

Published in