What Has Changed About Owning Honeywell Stock?

October 28th, 2026 · by Trefis Team
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If you own Honeywell International (HON), you probably hold it for the cash it returns through a dividend and share buybacks. The company has just changed shape. Honeywell reported its third quarter on October 22, 2026, marking its first quarter as a standalone business following the aerospace spin-off. So, does the cash Honeywell brings in still cover what it spends buying back its own shares?

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Buybacks Outran Free Cash Flow Over The Past Year

Based on the reported twelve-month figures, no. Over the last twelve months to September 30, 2026, Honeywell spent $1.1 billion buying back its own shares, completing all of those purchases by March 2026. Yet its free cash flow, the cash from operations left after capital spending, came to about $0.8 billion.

For the three years prior, that relationship was reversed. At each of the 13 quarter ends from June 2023 to June 2026, Honeywell generated more free cash over the previous twelve months than it spent on its own shares.

Honeywell’s Free Cash Flow Fell Faster Than Its Buybacks

Honeywell ended up spending more on buybacks than its free cash flow because the cash shrank, not because the company bought more stock. The earlier figures also include the aerospace business, 47% of 2025 revenue, which has since been spun off, so they do not compare on the same basis. Over the twelve months to September 2025, the company spent $4.16 billion on buybacks and still produced $6.6 billion of free cash flow. Since then, Honeywell has slowed its buying sharply, purchasing no shares in the second or third quarter of 2026. Yet its free cash flow fell even further. In the first quarter of 2026 alone, more cash went out than came in, resulting in an outflow of $0.87 billion.
Management measures cash its own way, and by that metric, cash is rising. It put third-quarter free cash flow at roughly $690 million, up 15%. On the reported figures used above, the quarter’s free cash flow was $0.12 billion. It also raised its forecast for free cash flow in 2026 by $100 million, to $2.1 billion.

What The Cash Shortfall Means For Honeywell Holders

For you as a holder, the clearest change is that your stake in the company has stopped growing. Honeywell’s diluted share count fell from 349 million over the twelve months to September 2021 to 319 million over the twelve months to September 2025. This meant each share you held represented a slightly larger part of the business. Over the latest twelve months, the share count held steady at that level.

Most of the cash you now receive comes as the dividend. Measured against Honeywell’s market value at the October 27 close, the dividends paid over the last twelve months came to 3.7%, while buybacks amounted to 1.6%. Most of those dividends were paid before the spin-off. In its first standalone quarter Honeywell paid $0.24 billion, about 1.4% of its market value at an annual pace. All of those buybacks took place before the company’s first quarter as a standalone business, as did three of the four quarters covered by the dividends. Those dividends alone were more than three times Honeywell’s free cash flow over those twelve months. Management has also stated where its cash goes first: on the October 22 call, it said its highest priority was to bring its leverage ratio, debt measured against earnings, to 3.0 times or below.

As late as June 2026, a Honeywell holder could assume the company brought in more cash than it spent on its own shares, with money to spare. On the reported figures for the last twelve months, that dynamic no longer holds. When Honeywell next reports, expected in January 2027, the figure to watch is its free cash flow over the twelve months to December, set beside what it spends on buybacks and dividends.

How To Act On HON?

Now you know Honeywell International better. Our purpose is to inform you so you can decide for yourself, and acting on one stock, in either direction, carries its own risk.

If you would rather own a portfolio built to spread that risk, the Trefis High Quality (HQ) Portfolio holds 30 quality companies in equal weight. Since its inception in September 2020 it has returned 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000.

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