Stock Analysis on Net
Stock Analysis on Net
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Honeywell International Inc. (NYSE:HON)

Analysis of Investments

Advanced level

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

Honeywell International Inc., adjustment to net income attributable to Honeywell

US$ in millions

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12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net income attributable to Honeywell (as reported) 4,779  6,143  6,765  1,655  4,809 
Add: Changes in fair value of available for sale investments 4  —  —  —  — 
Net income attributable to Honeywell (adjusted) 4,783  6,143  6,765  1,655  4,809 

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10).

Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)

Honeywell International Inc., adjusted profitability ratios

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net Profit Margin
Reported net profit margin 14.64% 16.73% 16.18% 4.08% 12.24%
Adjusted net profit margin 14.66% 16.73% 16.18% 4.08% 12.24%
Return on Equity (ROE)
Reported ROE 27.23% 33.22% 37.21% 9.58% 24.83%
Adjusted ROE 27.26% 33.22% 37.21% 9.58% 24.83%
Return on Assets (ROA)
Reported ROA 7.40% 10.47% 11.71% 2.79% 8.88%
Adjusted ROA 7.41% 10.47% 11.71% 2.79% 8.88%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10).

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Honeywell International Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Honeywell International Inc.’s adjusted ROE deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Honeywell International Inc.’s adjusted ROA deteriorated from 2018 to 2019 and from 2019 to 2020.

Honeywell International Inc., Profitability Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Honeywell 4,779  6,143  6,765  1,655  4,809 
Net sales 32,637  36,709  41,802  40,534  39,302 
Profitability Ratio
Net profit margin1 14.64% 16.73% 16.18% 4.08% 12.24%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Honeywell 4,783  6,143  6,765  1,655  4,809 
Net sales 32,637  36,709  41,802  40,534  39,302 
Profitability Ratio
Adjusted net profit margin2 14.66% 16.73% 16.18% 4.08% 12.24%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10).

2020 Calculations

1 Net profit margin = 100 × Net income attributable to Honeywell ÷ Net sales
= 100 × 4,779 ÷ 32,637 = 14.64%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Honeywell ÷ Net sales
= 100 × 4,783 ÷ 32,637 = 14.66%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Honeywell International Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Adjusted Return on Equity (ROE)

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Honeywell 4,779  6,143  6,765  1,655  4,809 
Total Honeywell shareowners’ equity 17,549  18,494  18,180  17,276  19,369 
Profitability Ratio
ROE1 27.23% 33.22% 37.21% 9.58% 24.83%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Honeywell 4,783  6,143  6,765  1,655  4,809 
Total Honeywell shareowners’ equity 17,549  18,494  18,180  17,276  19,369 
Profitability Ratio
Adjusted ROE2 27.26% 33.22% 37.21% 9.58% 24.83%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10).

2020 Calculations

1 ROE = 100 × Net income attributable to Honeywell ÷ Total Honeywell shareowners’ equity
= 100 × 4,779 ÷ 17,549 = 27.23%

2 Adjusted ROE = 100 × Adjusted net income attributable to Honeywell ÷ Total Honeywell shareowners’ equity
= 100 × 4,783 ÷ 17,549 = 27.26%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Honeywell International Inc.’s adjusted ROE deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Assets (ROA)

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Honeywell 4,779  6,143  6,765  1,655  4,809 
Total assets 64,586  58,679  57,773  59,387  54,146 
Profitability Ratio
ROA1 7.40% 10.47% 11.71% 2.79% 8.88%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Honeywell 4,783  6,143  6,765  1,655  4,809 
Total assets 64,586  58,679  57,773  59,387  54,146 
Profitability Ratio
Adjusted ROA2 7.41% 10.47% 11.71% 2.79% 8.88%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10).

2020 Calculations

1 ROA = 100 × Net income attributable to Honeywell ÷ Total assets
= 100 × 4,779 ÷ 64,586 = 7.40%

2 Adjusted ROA = 100 × Adjusted net income attributable to Honeywell ÷ Total assets
= 100 × 4,783 ÷ 64,586 = 7.41%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Honeywell International Inc.’s adjusted ROA deteriorated from 2018 to 2019 and from 2019 to 2020.