3M (NYSE:MMM) vs. Honeywell International (NASDAQ:HON) Critical Survey

3M (NYSE:MMM) and Honeywell International (NASDAQ:HON) are both large-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Risk and Volatility

3M has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, Honeywell International has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Earnings and Valuation

This table compares 3M and Honeywell International”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
3M	$24.95 billion	3.64	$3.25 billion	$6.71	26.20
Honeywell International	$37.74 billion	1.89	$4.73 billion	$22.23	10.09

Honeywell International has higher revenue and earnings than 3M. Honeywell International is trading at a lower price-to-earnings ratio than 3M, indicating that it is currently the more affordable of the two stocks.

Dividends

3M pays an annual dividend of $3.12 per share and has a dividend yield of 1.8%. Honeywell International pays an annual dividend of $7.14 per share and has a dividend yield of 3.2%. 3M pays out 46.5% of its earnings in the form of a dividend. Honeywell International pays out 32.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. 3M has increased its dividend for 1 consecutive years and Honeywell International has increased its dividend for 14 consecutive years. Honeywell International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares 3M and Honeywell International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
3M	14.01%	123.11%	12.70%
Honeywell International	24.36%	25.62%	6.56%

Analyst Recommendations

This is a breakdown of current ratings for 3M and Honeywell International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
3M	1	8	6	1	2.44
Honeywell International	1	12	13	0	2.46

3M presently has a consensus target price of $185.36, indicating a potential upside of 5.44%. Honeywell International has a consensus target price of $249.96, indicating a potential upside of 11.40%. Given Honeywell International’s stronger consensus rating and higher probable upside, analysts clearly believe Honeywell International is more favorable than 3M.

Insider & Institutional Ownership

65.2% of 3M shares are held by institutional investors. Comparatively, 75.9% of Honeywell International shares are held by institutional investors. 0.2% of 3M shares are held by insiders. Comparatively, 0.2% of Honeywell International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Honeywell International beats 3M on 11 of the 18 factors compared between the two stocks.

About 3M

3M Company provides diversified technology services in the United States and internationally. The company’s Safety and Industrial segment offers industrial abrasives and finishing for metalworking applications; autobody repair solutions; closure systems for personal hygiene products, masking, and packaging materials; electrical products and materials for construction and maintenance, power distribution, and electrical original equipment manufacturers; structural adhesives and tapes; respiratory, hearing, eye, and fall protection solutions; and natural and color-coated mineral granules for shingles. Its Transportation and Electronics segment provides ceramic solutions; attachment/bonding products, films, sound, and temperature management for transportation vehicles; premium large format graphic films for advertising and fleet signage; light management films and electronics assembly solutions; packaging and interconnection solutions; semiconductor production materials; data centers solutions; and reflective signage for highway, and vehicle safety. The company’s Consumer segment provides consumer bandages, braces, supports, and consumer respirators; home cleaning products; retail abrasives, paint accessories, car care DIY products, picture hanging, and consumer air quality solutions; and stationery products. It offers its products through e-commerce and traditional wholesalers, retailers, jobbers, distributors, and dealers. 3M Company was founded in 1902 and is headquartered in Saint Paul, Minnesota.

About Honeywell International

Honeywell International Inc. engages in the aerospace technologies, building automation, energy and sustainable solutions, and industrial automation businesses in the United States, Europe, and internationally. The company’s Aerospace segment offers auxiliary power units, propulsion engines, integrated avionics, environmental control and electric power systems, engine controls, flight safety, communications, navigation hardware, data and software applications, radar and surveillance systems, aircraft lighting, advanced systems and instruments, satellite and space components, and aircraft wheels and brakes; spare parts; repair, overhaul, and maintenance services; and thermal systems, as well as wireless connectivity services. Its Honeywell Building Technologies segment provides software applications for building control and optimization; sensors, switches, control systems, and instruments for energy management; access control; video surveillance; fire products; and installation, maintenance, and upgrades of systems. The company’s Performance Materials and Technologies segment offers automation control, instrumentation, and software and related services; catalysts and adsorbents, equipment, and consulting; and materials to manufacture end products, such as bullet-resistant armor, nylon, computer chips, and pharmaceutical packaging, as well as provides materials based on hydrofluoro-olefin technology. Its Safety and Productivity Solutions segment provides personal protective equipment, apparel, gear, and footwear; gas detection technology; custom-engineered sensors, switches, and controls for sensing and productivity solution; cloud-based notification and emergency messaging; mobile devices and software; custom-engineered sensors, switches, and controls; and data and asset management productivity solutions. Honeywell International Inc. was founded in 1885 and is headquartered in Charlotte, North Carolina.