Here’s A Better Pick Over Honeywell Stock

We believe that Emerson Electric stock (NYSE: EMR) is a better pick than Honeywell stock (NYSE: HON), given its better prospects. Honeywell is trading at a comparatively higher valuation multiple of 3.6x trailing revenues vs. 2.4x for Emerson, and we think that this gap in valuation should narrow in favor of Emerson, given its superior revenue growth and profitability, as discussed below.

Looking at stock returns, Honeywell, with -11% returns this year, has fared marginally better than EMR, down 13%, and both have underperformed the broader markets, with the S&P 500 index, up 7%. There is more to the comparison, and in the sections below, we discuss why we believe EMR stock will offer better returns than HON stock in the next three years. We compare a slew of factors, such as historical revenue growth, returns, and valuation multiple, in an interactive dashboard analysis of Honeywell vs. Emerson Electric
EMR
: Which Stock Is A Better Bet? Parts of the analysis are summarized below.