The Dow Jones Industrial Average made headlines on May 14 after closing above 50,000, but the index would sit even higher had it not made one of its more questionable roster changes back in 2020. When Honeywell International (NASDAQ: HON) replaced RTX (NYSE: RTX) on August 31 of that year, the decision appeared logical on the surface. Honeywell was positioned as a forward-thinking industrial conglomerate with software capabilities, Internet of Things ambitions, and diversified end-market exposure.
The gap in performance since that swap tells a different story. Between August 31, 2020 and May 14, 2026, RTX delivered a total return of roughly 231%, while HON managed just 56%. That near-175 percentage point divergence has prompted fresh questions about whether the Dow Jones Industrial Average made a costly error in judgment.
Honeywell was brought back into the index after being removed in 2008 due to its relatively modest earnings and revenue at the time. By 2020, the company had grown into a sprawling industrial giant with fingers in aerospace, commercial buildings, oil and gas, healthcare, military, and manufacturing. Its Honeywell Forge software suite was billed as a platform that would bring smart, connected capability to legacy industries. The pitch was compelling. The execution was not.
Honeywell spent the years that followed battling supply chain disruptions, inflationary pressures, weak free cash flow growth, and structural inefficiencies that activist investor Elliott Investment Management eventually lost patience with. In November 2024, Elliott amassed a position worth more than $5 billion and pushed hard for a breakup. Honeywell listened. It spun off Solstice Advanced Materials (NASDAQ: SOLS) in October 2025, a move that has already generated a near-80% gain. A further spinoff of Honeywell Aerospace under the ticker HONA is scheduled for June 29, with the remaining business focusing on industrial and building automation.
RTX, by contrast, kept things simple. As a pure-play defence contractor with reliable government contracts, consistent earnings growth, and a track record of returning capital to shareholders through a growing dividend, the stock offered the kind of clarity that investors tend to reward over time. Geopolitical tensions have only added tailwind to that story.
The Dow Jones Industrial Average has been quietly evolving away from its industrial roots for years. Amazon replaced Walgreens Boots Alliance, Nvidia (NASDAQ: NVDA) took Intel’s (NASDAQ: INTC) seat, and Sherwin-Williams (NYSE: SHW) stepped in for Dow Inc (NYSE: DOW). The index increasingly reflects the broader market rather than a narrow slice of heavy industry. Whether HON retains its place following its upcoming restructuring remains an open question, but the case for RTX to return has only grown stronger.
