Jim Cramer: Why 100 year-old Dow stock Honeywell is a big bet on the future
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Most companies kicked off the Dow Jones Industrial Average don't make it back on. But Honeywell , which was on the Dow from 1925 to 2008, was added back in August. "I was literally looking at my phone, and I had one of these Wall Street Journal tags come across that basically said, 'Honeywell and Salesforce and Amgen rejoined the Dow,'" Honeywell CEO Darius Adamczyk told CNBC's Jim Cramer at the CNBC Evolve Summit on Tuesday. That event came just a short time before Honeywell celebrated its 100-year anniversary. Getting to 100, and getting back on the Dow, speaks to how Honeywell has remained relevant. Adamczyk says technology, primarily software, has been key for Honeywell. As the company known for its industrial sector history expands into more business lines, the CEO said there is one common thread that reinforces the software story. Whether it is buildings' systems, aerospace, industrials, or warehouse automation, Honeywell is "predominantly a controls company," Adamczyk said. "Whether it's controlling how a building operates, controlling how an aircraft flies, controlling the warehouse, that is the common thread," he said. "When you control things, you have to be connected to everything, and you have to collect the data that's exhibited in all the devices, all the sensors throughout the systems."

Zoom In Icon Arrows pointing outwards Honeywell, which has faced difficult business conditions for many of its operating units during the pandemic, has bounced back and reached its highest stock price in five years. Jim Cramer says it's still not "classically expensive."

Honeywell is not just control the data flow, but using it to generate value, such as in energy savings. "Whether it's our offerings in connected buildings, connected aircraft, connected warehouse, we're just leveraging what we've been doing in a very different way. I know we're kind of viewed as this industrial company ... those are our roots, but we're also a controls company and a technology company." The Honeywell-connected enterprise business, which is run by Que Dallara, is a software as a service company. And it is at the forefront of bleeding edge technology, such as quantum computing, which seeks to supplant the era of the microchip as the limit on available computing power. "We're gaining customers literally by the day," Adamczyk said of quantum computing. "I mean, you know, I promised our investors that in 2020 this will become real and we'll start generating revenue and we are, and it's going to accelerate next year." Software is big part of Honeywell's future That is a microcosm of where the company is going long term as it moves beyond its roots, which the CEO described as "a hybrid that's going to have some hardware presence, but the software is going to become a much more prominent part of who we are and how we move forward." As the shipping business booms as a result of the coronavirus, Honeywell is also seeing big growth from its automated warehouse segment. "The business is booming right now, and it's not a surprise. I mean, obviously the Covid era really drove to home delivery, warehouse automation," Adamczyk said. "We're trying to move it even more towards the use of robotics, use of what we call a 'dark warehouse,' which is minimizing labor in a warehouse, and we're making great progress and winning a lot of jobs." The Honeywell CEO said it's been "a great bookings year" for Intelligrated — Intelligrated is the material handling automation and software engineering company. "I think it's only the beginning. Sure, Covid accelerated that trend, but it's something that's going to continue."

We're trying to stay relevant to what it's going to need for the next decade. Darius Adamczyk Honeywell CEO