Honeywell International Inc. (HON) vs Netflix, Inc. (NFLX): Which Is the Better Buy in 2026?
As of 2026-08-03, HON is undervalued at $243, with a DCF intrinsic value of $653 and a margin of safety of 63%. NFLX is undervalued at $72, with an intrinsic value of $127 and a margin of safety of 44%. Of the two, HON has the wider margin of safety.
Rewards
- ★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.
- ★Netflix, Inc. has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
- ★Netflix, Inc. scores 85/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
- ★Free cash flow has grown at a 80.1% CAGR over the past 4 years, demonstrating strong earnings power growth.
Risks
- ⚠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.
- ⚠Buybacks have been poorly timed — 2 out of 3 years involved repurchases at relatively expensive valuations.
- ⚠Insiders have sold $39.3M 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 →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.
What growth rate is the market pricing in at $72?
The market implies -0.1% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +0.8%, reflecting heavy growth investment expected to generate future returns.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. Margin Stability is the standout factor.
Wide moat driven primarily by roic consistency. Margin Stability is the area most vulnerable to competitive pressure.
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 pessimistic — investigate whether fears are temporary or structural"
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: HON vs NFLX
Is Honeywell International Inc. or Netflix, 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 NFLX's 43.6% margin of safety (intrinsic $127 vs. $72).
Which stock has a wider economic moat, Honeywell International Inc. or Netflix, Inc.?▼
NFLX scores 85/100 (Wide moat), while HON scores 85/100 (Wide 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. NFLX scores 10.9 (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 company has better free cash flow, Honeywell International Inc. or Netflix, Inc.?▼
Netflix, Inc. (NFLX) generates a 8.5% free cash flow yield, compared to Honeywell International Inc.'s 7.0%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Honeywell International Inc. or Netflix, Inc.?▼
NFLX earns 27.3% 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.