Honeywell InternationalNASDAQ: HON

LATHAM, N.Y.--(BUSINESS WIRE)--Protective Industrial Products, Inc. (“PIP®”) has announced that it will acquire the Personal Protective Equipment Business (“PPE Business”) from Honeywell (NASDAQ: HON), which includes well-known brands like Fendall, Fibre-Metal, and Howard Leight. PIP is backed by Odyssey Investment Partners, LLC. The PPE Business provides a wide range of high-quality products.

The sale allows Honeywell to make its operations easier and more efficient, focusing on three major trends: automation, the future of aviation, and energy transition. This positions Honeywell to keep achieving profitable growth and generating strong cash flow, which benefits its shareholders in the long run. The announcement comes from Charlotte, North Carolina.

We think Honeywell stock (NYSE: HON) is a better choice than 3M stock (NYSE: MMM) because of its stronger valuation and future potential. Honeywell is currently trading at 22 times its expected earnings, while 3M is at 18 times. We believe this difference in valuation will continue to favor Honeywell due to its superior revenue growth and profitability.

HON is set to gain from the strong performance of its Aerospace Technologies division, the assets it has acquired, and its policies that favor shareholders.

Elliott Management's push for Honeywell to split up could increase shareholder value by 40% to 64% by separating its aerospace and automation divisions. The aerospace sector is strong, which could lead to long-term growth for Honeywell, especially with high-profit aftermarket sales and increasing demand in both commercial and defense areas. However, there are risks involved, such as the need for management to work together and potential delays, and the current price-to-earnings ratio of 22.7x seems high without any progress on the spin-off.

Honeywell International Inc (NASDAQ:HON) will be participating in the Baird Global Industrials Conference on November 12, 2024, at 8:20 AM ET. The company will be represented by Ken West, the President and CEO of Energy and Sustainability Solutions. Peter Arment from Baird will also be part of the conference call.

Summary of the Agreement

Jim Cramer, the host of 'Mad Money,' examines the investment activities of activists.

Elliott Investment Management, an activist investor, has acquired a stake of over $5 billion in Honeywell International Inc and is urging the company to divide its aerospace and automation divisions. In a letter to the board on Tuesday, Elliott argued that a simpler structure would help Honeywell and that splitting the company could lead to two strong leaders in their sectors, benefiting customers, employees, and shareholders.