Honeywell’s dividend yield
As of May 22, Honeywell’s (HON) dividend yield was ~1.9%, which is lower than the dividend yield of 2.06% at the end of the first quarter. In the past six years, Honeywell’s dividend yield has been 1.8%–2.7%. In comparison, Boeing (BA), United Technologies (UTX), and Textron (TXT) have dividend yields of 2.2%, 2.06%, and 0.15%, respectively. So, Honeywell’s dividend yield is marginally lower compared to its selected peers with the exception of Textron.
Current dividend yield and trend
As we mentioned above, Honeywell’s dividend yield has been hovering around 1.8%–2.7% despite the company’s dividend growing at a compound annual growth rate of ~11.5% since 2012. Honeywell’s lower dividend yield is mainly due to the increase in the stock price, which has outpaced the dividend growth. On a year-to-date, Honeywell has gained ~29.5%—one of the major factors for the decline in Honeywell’s dividend yield.
Honeywell’s current dividend yield is lower than the yield generated from the risk-free one-year Treasury bonds, which might be a little discouraging for dividend investors. However, investors should also be aware that the increased stock price resulted in a lower dividend yield, which gives investors the opportunity for better capital gains. If Honeywell stock continues to gain without an increase in dividend rate, the dividend yield will decline.
Investors could hold Honeywell indirectly by investing in the Industrial Select Sector SPDR ETF (XLI). XLI invests 5.5% of its portfolio in Honeywell as of May 23.