5-Star Honeywell’s (HON) best-in-class cyber governance is driven by its strong financials, rock-solid balance sheet and above average cybersecurity. It is a case of a very well-managed company that is also managing its cyber governance at a high level. HON management has placed its digital transformation strategy front and center, and this translates through to its financials, helping improve cashflow and margin expansion.
A well-managed company overall, FERG has executed effectively on its digital strategy and invested sufficiently in security to manage the downside financial risks associated with its increased digitization. Strong execution on e‑commerce, its customer sales and maintenance and back-end operations has yielded tangible benefits to the business, helping management deliver on key KPIs including solid margins. This has contributed to FERG’s 4-Star cyber governance rating (out of 5) on a regional basis and 5-Star rating on a relative basis among European industrials.
Though Home Depot (HD) was caught up in the early COVID‑19 market turmoil, it is better positioned to weather the crisis thanks in part to consistently above-average cyber governance overall (4-star rating out of five stars) and a 5-star leader in its peer group. This takes on greater importance for a consumer staples company with a business-critical digital strategy that drives greater margins and improved productivity. HD was already well-along in the execution of this strategy before the lockdowns commenced—a strategy Cyberhedge views as a solid hedge against macro events such as COVID‑19 and a recession.