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Honeywell and TAL International Amp Up Dividends

October 31, 2013 | About:
Monica Wolfe

Monica Wolfe

119 followers
As the number one maker of small-jet engines and equipment for climate and process control it should come as no surprise that Honeywell International (HON) pleased its shareholders once again. On Oct. 22 Honeywell pumped its quarterly cash dividend by 10% to $0.45 per share. This cash distribution is up from last quarter’s $0.41 per share.

This increase is the fourth increase in dividend that the company has made over the past three years. And the most recent increase will add approximately $126 million to the company’s yearly payouts. At this new rate, Honeywell’s dividend yield is at 2.1%. The company has paid cash distributions every year since 1887.

Honeywell’s historical dividend growth:

· 10-year: 10.40%

· 5-year: 8.10%

· 3-year: 8.10%

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Honeywell International is a Fortune 100 diversified technology and manufacturing company that specializes in aerospace products and services, control technologies, turbochargers and performance materials.

Honeywell’s historical revenue and net income:

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Honeywell’s price is currently trading at a 52-week high as well as a 10-year high.

The company’s corporate executives have been receiving quite a bit of praise this year. Honeywell’s CEO Dave Cote was named Chief Executive’s CEO of the year and for the first time was named to Barron’s list of the 30 best CEOs in the world. Senior VP of Human Resources, Procurement and Communications Mark James was also named as the 2013 HR Executive of the Year by Human Resource Executive, the leading HR business magazine.

The company recently released their third quarter results which reported:

· Sales of $9.6 billion, up 3% year-over-year.

· EPS of $1.24 per share, up 3% from last year, or up 10% using a normalized tax rate.

· Increased EPS guidance to $4.90 to $4.95, up from the previous guidance of $4.85 to $4.95.

· Cash Flow from Operations of $1.070 billion, up 7% from $999 million last year.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Honeywell International has a market cap of $68.09 billion. Its shares are currently trading at around $86.77 with a P/E ratio of 21.30, a P/S ratio of 1.80 and a P/B ratio of 5.00. The company had an annual average earnings growth of 8.20% over the past ten years.

As one of the largest and oldest freight containers in the world TAL International (TAL) was able to increase its quarterly cash distribution yet again.

TAL International increased its dividend by $0.02 per share to $0.70 per share, representing a 5.8% dividend yield for the company. The dividend has been on the rise since the company docked the distribution down to $0.01 per share in February 2009. A year later, TAL began increasing dividends again, and has done so every quarter but one since then.

TAL expects that its cash dividend will qualify as a return of capital as opposed to a taxable dividend. The company has offered quarterly cash distributions every quarter since 1996.

TAL International’s historical dividend growth:

· 10-year: 0%

· 5-year: 69.10%

· 3-year: 288.70%

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TAL International is one of the world’s oldest and largest lessors of intermodal freight containers. The company was founded in 1963, and today they serve virtually every major shipping line in the world. TAL’s fleet includes approximately 2 million TEU of dry containers, refrigerated containers, tank containers, open tops, flat racks, chassis and palletwide containers.

TAL International’s historical revenue and net income:

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TAL International is currently trading near its record high price.

TAL’s third quarter financials reported:

· Pre-tax income of $1.60 per fully diluted share, up 8.1% from last year.

· Leasing revenues of $143.9 million, up 6.4% from last year.

· Adjusted EBITDA of $142.8 million, up 1.3% from 2012.

· Net income of $34.7 million, up 11.2% from the third quarter 2012.

The Peter Lynch Chart suggests the company is currently undervalued:

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TAL International has a market cap of $1.64 billion. Its shares are currently trading at around $48.31 with a P/E ratio of 11.30, a P/S ratio of 2.50 and a P/B ratio of 2.50. The company had an annual average earnings growth of 18.40% over the past five years.

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Rating: 2.7/5 (3 votes)

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