By Stephen Leeb, Income Performance Letter

The economy has shown undeniable signs of expanding at an accelerated rate in recent months, and we see many excellent opportunities for investors willing to focus beyond just the next quarter or two.

We're adding Honeywell International (HON) to our model portfolio. A member of the Dow Industrial Average, Honeywell is generally thought of as an old-school conglomerate. But in truth, the company boasts a line-up that includes many leading-edge products, and it frequently holds top positions in the markets it serves.

The company's many businesses are divided along four operating units: Automation &  Control Solutions, Aerospace, Transportation Systems and Specialty Materials, each of which is enjoying strong growth these days.

Honeywell's environmental controls, sensing and security equipment (41% of sales), which are employed in millions of homes, buildings and industrial facilities, promote energy efficiency, improved productivity and cost savings.

Its aerospace products, such as avionics and turbofan engines (32% of sales) are found on virtually every commercial aircraft flying today.

Honeywell’s Transportation Systems (14% of sales) include turbochargers and brake products used by most auto manufactures.

Its Specialty Materials encompass an array of products, but we are most excited about those that reduce emissions, boost oil refinery output and enable the production of "green" fuels.

While the Fortune 100 company has broad exposure to cyclical industries, it's nevertheless fairly well insulated from the vagaries of the business cycle. Yet recently, the stock has been under pressure due to troubles in Europe.

The market's reaction to these events, however, is likely overblown as the company's European exposure represents less than a quarter of Honeywell's sales.

More important are its sales to emerging markets, which have climbed from 17% to 20% in the past year alone. They are only going to become a bigger slice of the pie as time goes by.

In the meantime, the stock is selling at a discount to peers and its projected earnings growth rate, which should top 15% annually in the next five years. And at little more than one times sales, the stock has seldom been cheaper.

Adding to its attractiveness, Honeywell pays a 2.9% dividend yield. The payout has risen at a 7% annual pace in the past decade, a pace we expect the company to match, if not exceed, going forward.

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