Two diversified industrial giants; two companies whose sales growth has stuttered in recent years; two that underwent piecemeal reorganization that left investors unimpressed; and two stocks that are both down this year. (NASDAQ: HON) and 3M (NYSE: MMM) have some things in common, but will that similarity lead Honeywell to the kind of dismal stock performance (down 55% in five years) 3M investors suffered recently? Here's the lowdown. 

The best way to answer the question is with three "nays" and one "maybe." The first nay comes from looking at each company's earnings growth prospects. To be clear, I'm not talking about the legal issues 3M has had in recent years. They have undoubtedly hurt the stock price, but what's sometimes forgotten is its disappointing operational performance. 

There are two things to focus on here. The first is profit margin progression, and the second is revenue growth. A quick look at each company's profit margins over the last decade shows contrasting performance. Honeywell's gross profit margin (a good indicator of how much pricing power a company has) is rising, while 3M's is in decline. It's the same story with operating profit margin, implying that Honeywell can grow profits even on flat revenue. 

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Source Fool.com