ClearBridge Dividend Strategy on Honeywell Aerospace
Thesis
ClearBridge increased its exposure to Honeywell Aerospace following its separation from Honeywell International. The newly independent business traded at a more attractive valuation, creating an opportunity to add to a higher-conviction industrial holding. Although initial results included lower adjusted earnings and separation-related costs, ClearBridge considers the supply-chain challenges temporary. The position reflects the strategy's willingness to look beyond near-term operational disruption when valuations become more appealing.
“We added to other, higher-conviction, industrials positions: Honeywell Aerospace, recently spun off from Honeywell International and trading at a more attractive valuation”
Key risks
- Continuing supply-chain constraints could delay recovery.
- Separation-related costs have weighed on earnings.
- Management reduced its full-year sales and adjusted earnings outlook.
- Temporary headwinds could persist longer than anticipated.