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Honeywell Augments Fire Business With SCAME Acquisition

By Zacks Investment ResearchStock MarketsNov 30, 2017 08:30PM ET
www.investing.com/analysis/honeywell-augments-fire-business-with-scame-acquisition-200269791
Honeywell Augments Fire Business With SCAME Acquisition
By Zacks Investment Research   |  Nov 30, 2017 08:30PM ET
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Diversified technology company, Honeywell International Inc. (NYSE:HON) recently inked a definitive agreement to acquire Italian firm SCAME Sistemi, s.r.l. for an undisclosed amount. The strategic transaction is likely to augment Honeywell’s fire business within the Connected Building solutions portfolio and extend its customer coverage.

Since its inception in 1979, SCAME has created a niche for itself with a wide variety of products in the field of fire & gas detection and fire extinguishing systems. It offers an integrated portfolio of products that are user friendly and highly customizable through a single interface and a supervisory software platform. These include system configuration, testing and monitoring to set the equipment at predefined safety integrity levels according to the unique needs of customers. This, in turn, would allow users to maintain a tolerable risk level for their safety systems and thereby actively manage operating risks for a potentially dangerous system failure.

With such innovative products, SCAME would enable Honeywell to offer a seamless integration of industrial controllers and management systems that facilitate easy access to critical information, alerts and control. This would make industrial sites across the globe more safe and secure, creating new business opportunities for Honeywell, thereby boosting revenues.

Honeywell has outperformed the industry with an average year-to-date return of 34.7% as against a decline of 3% for the latter. Its diversified business portfolio has the potential to earn consistent above-average returns and mitigate operating risks. The company’s diligent focus on working capital management, free cash flow generation and a conservative balance sheet remain key positives amid a challenging macroeconomic environment.



In addition, the company’s balanced mix of long- and short-cycle businesses, along with a decent organic growth in new products and expansion in high-growth regions augur well on a long-term basis. With a flexible yet disciplined focus on cost and productivity, Honeywell remains aims to increase its presence in high-growth regions. Additionally, the company is building a robust pipeline of new products.

Honeywell currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are Danaher Corporation (NYSE:DHR) , Federal Signal Corporation (NYSE:FSS) and Leucadia National Corporation (NYSE:LUK) , each carrying Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Danaher has a long-term earnings growth expectation of 10.6%. It has beaten earnings estimates in each of the trailing four quarters with an average positive surprise of 2.6%.

Federal Signal has beaten earnings estimates thrice in the trailing four quarters with an average positive surprise of 11.5%.

Leucadia has a long-term earnings growth expectation of 18%. It has beaten earnings estimates thrice in the trailing four quarters with an average positive surprise of 21.2%.

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Danaher Corporation (DHR): Free Stock Analysis Report

Honeywell International Inc. (HON): Free Stock Analysis Report

Leucadia National Corporation (LUK): Free Stock Analysis Report

Federal Signal Corporation (FSS): Free Stock Analysis Report

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Zacks Investment Research

Honeywell Augments Fire Business With SCAME Acquisition
 

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Honeywell Augments Fire Business With SCAME Acquisition

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