Chevron Corporation (CVX) vs Honeywell International Inc. (HON): Which Is the Better Buy in 2026?
As of 2026-08-03, CVX is overvalued at $197, with a DCF intrinsic value of $139 and a margin of safety of -42%. HON is undervalued at $243, with an intrinsic value of $653 and a margin of safety of 63%. Of the two, HON has the wider margin of safety.
Rewards
- ★PEG ratio of 0.80 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
- ★Honeywell International Inc. has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
- ★Honeywell International Inc. scores 85/100 on the Economic Moat Score (Wide Moat), with margin stability as the strongest competitive dimension.
- ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.
Risks
- ⚠ROIC has declined by 11.0 percentage points over the past 4 years, which may signal competitive erosion.
- ⚠Buybacks have been poorly timed — 3 out of 4 years involved repurchases at relatively expensive valuations.
- ⚠Trailing P/E of 18.9x is 25% above the historical average of 15.2x — the stock trades at a premium to its own history.
- ⚠FCF yield of 7.0% suggests reasonable valuation assuming continued moderate growth.
- ⚠PEG ratio of 3.84 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠Insiders have sold $4.2M worth of stock in the past 3 months — significant insider liquidation.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →Requires positive FCF to compute implied growth rate.
What growth rate is the market pricing in at $243?
The market implies +7.7% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +7.0%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Narrow moat with revenue predictability as the key competitive advantage. Improving roic consistency would strengthen the moat.
Wide moat with strength across all dimensions. Margin Stability is the standout factor.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is optimistic — be cautious and ensure you have a margin of safety"
"Market is optimistic — be cautious and ensure you have a margin of safety"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: CVX vs HON
Is Chevron Corporation or Honeywell International Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, HON trades at a 62.8% margin of safety (intrinsic value $653 vs. price $243), compared to CVX's -41.8% margin of safety (intrinsic $139 vs. $197).
Which stock has a wider economic moat, Chevron Corporation or Honeywell International Inc.?▼
HON scores 85/100 (Wide moat), while CVX scores 43/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Honeywell International Inc. in financial distress?▼
HON's Altman Z-Score of 2.5 places it in the Grey zone, signaling elevated bankruptcy risk. CVX scores 3.0 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which stock has higher return on invested capital, Chevron Corporation or Honeywell International Inc.?▼
CVX earns 15.5% ROIC versus HON's 11.3%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Chevron Corporation's or Honeywell International Inc.'s?▼
HON's dividend earns a safety score of 84/100 (Very Safe), compared to CVX's 30/100 (Unsafe). HON has raised its dividend for 3 consecutive years.