Stanley Black & Decker (NYSE:SWK) - Share price, News & Analysis

Q: What is the Fair Price of SWK when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

SWK ($109.23) is trading below our estimate of [[fair value]] ($210.81)

SWK fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	2/6
Past Performance	1/6
Financial Health	2/6
Dividends	4/6

SWK Stock Overview

Stanley Black & Decker, Inc. engages in the tools and storage and industrial businesses in the United States, Canada, rest of Americas, France, rest of Europe, and Asia.

Rewards

Trading at 48.2% below our estimate of its fair value

Earnings are forecast to grow 15.19% per year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 2.89% is not well covered by earnings

Large one-off items impacting financial results

Stanley Black & Decker Competitors

Dover

NYSE:DOV

US$17.7b

IDEX

NYSE:IEX

US$14.0b

Xylem

NYSE:XYL

US$14.3b

Nordson

NasdaqGS:NDSN

US$11.8b

Price History & Performance

Summary of all time highs, changes and price drops for Stanley Black & Decker
Historical stock prices
Current Share Price	US$109.23
52 Week High	US$210.92
52 Week Low	US$99.43
Beta	1.37
1 Month Change	-8.73%
3 Month Change	-25.37%
1 Year Change	-46.68%
3 Year Change	-25.82%
5 Year Change	-22.96%
Change since IPO	449.59%

Recent News & Updates

Jun 26

Stanley Black & Decker: This Dividend King Could Potentially Triple In 5 Years

SWK was founded in 1843 in New Britain, Connecticut, and hasn't missed a dividend payment in 146 years (since 1876). SWK has the most trusted brands with the #1 market share globally. If SWK grows as analysts expect by 2024 and returns to historical mid-range fair value, it could deliver 125% total returns or 38% annually.

Jun 20

These 4 Measures Indicate That Stanley Black & Decker (NYSE:SWK) Is Using Debt Extensively

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...

Jun 09

Stanley Black & Decker Restated Its Earnings - Cause For Concern?

Stanley Black & Decker restated its 2018 to 2020 consolidated financial statements because of incorrect accounting for forward stock purchase contracts and convertible preferred stock. However, this only had a negative impact on diluted earnings per share of 3-4% - I will explain why it is highly unlikely that the accounting misstatement was intentional. Stanley Black & Decker continues to deliver strong results, but understandably faces industry-specific headwinds. However, these should not be overemphasized in my opinion. In this article, I present the results of my due diligence regarding accounting manipulation by discussing a number of accounting tests in detail.

Shareholder Returns

	SWK	US Machinery	US Market
7D	5.8%	1.8%	6.3%
1Y	-46.7%	-19.8%	-18.8%

Return vs Industry: SWK underperformed the US Machinery industry which returned -20.1% over the past year.

Return vs Market: SWK underperformed the US Market which returned -18.4% over the past year.

Price Volatility

Is SWK's price volatile compared to industry and market?
SWK volatility
SWK Average Weekly Movement	6.3%
Machinery Industry Average Movement	6.0%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	3.2%

Stable Share Price: SWK is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: SWK's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1843	71,300	Jim Loree	https://www.stanleyblackanddecker.com

Stanley Black & Decker, Inc. engages in the tools and storage and industrial businesses in the United States, Canada, rest of Americas, France, rest of Europe, and Asia. Its Tools & Storage segment offers professional products, including professional grade corded and cordless electric power tools and equipment, and pneumatic tools and fasteners; and consumer products, such as corded and cordless electric power tools primarily under the BLACK+DECKER brand, as well as corded and cordless lawn and garden products and related accessories; home products; and hand tools, power tool accessories, and storage products. This segment sells its products through retailers, distributors, dealers, and a direct sales force to professional end users, distributors, dealers, retail consumers, and industrial customers in various industries.

Stanley Black & Decker Fundamentals Summary

How do Stanley Black & Decker's earnings and revenue compare to its market cap?
SWK fundamental statistics
Market Cap	US$16.49b
Earnings (TTM)	US$1.29b
Revenue (TTM)	US$16.34b

12.8x

P/E Ratio

1.0x

P/S Ratio

Is SWK overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SWK income statement (TTM)
Revenue	US$16.34b
Cost of Revenue	US$11.11b
Gross Profit	US$5.24b
Other Expenses	US$3.94b
Earnings	US$1.29b

Last Reported Earnings

Apr 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	8.55
Gross Margin	32.03%
Net Profit Margin	7.90%
Debt/Equity Ratio	111.6%

How did SWK perform over the long term?

See historical performance and comparison

Dividends

2.9%

Current Dividend Yield

38%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is SWK undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SWK?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SWK. This is calculated by dividing SWK's market cap by their current preferred multiple.
What is SWK's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$16.49b

SWK key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.7x
Enterprise Value/EBITDA	11.7x
PEG Ratio	0.8x

Price to Earnings Ratio vs Peers

How does SWK's PE Ratio compare to its peers?

SWK PE Ratio vs Peers

The above table shows the PE ratio for SWK vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	25.9x
DOV Dover	15.9x	7.5%	US$17.7b
IEX IDEX	29.4x	12.8%	US$14.0b
XYL Xylem	33.9x	17.1%	US$14.3b
NDSN Nordson	24.3x	10.6%	US$11.8b
SWK Stanley Black & Decker	12.8x	15.2%	US$16.5b

Forward PE

Price-To-Earnings vs Peers: SWK is good value based on its Price-To-Earnings Ratio (12.8x) compared to the peer average (25.9x).

Price to Earnings Ratio vs Industry

How does SWK's PE Ratio compare vs other companies in the US Machinery Industry?

Price-To-Earnings vs Industry: SWK is good value based on its Price-To-Earnings Ratio (12.8x) compared to the US Machinery industry average (21.7x)

Price to Earnings Ratio vs Fair Ratio

What is SWK's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SWK PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	12.8x
Fair PE Ratio	24.9x

Price-To-Earnings vs Fair Ratio: SWK is good value based on its Price-To-Earnings Ratio (12.8x) compared to the estimated Fair Price-To-Earnings Ratio (24.9x).

Share Price vs Fair Value

What is the Fair Price of SWK when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SWK ($109.23) is trading below our estimate of fair value ($210.81)

Significantly Below Fair Value: SWK is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: SWK is good value based on its PEG Ratio (0.8x)

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Future Growth

How is Stanley Black & Decker forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

15.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SWK's forecast earnings growth (15.2% per year) is above the savings rate (1.9%).

Earnings vs Market: SWK's earnings (15.2% per year) are forecast to grow faster than the US market (13.9% per year).

High Growth Earnings: SWK's earnings are forecast to grow, but not significantly.

Revenue vs Market: SWK's revenue (4.7% per year) is forecast to grow slower than the US market (8.4% per year).

High Growth Revenue: SWK's revenue (4.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SWK's Return on Equity is forecast to be low in 3 years time (17.8%).

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Past Performance

How has Stanley Black & Decker performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

8.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SWK has a large one-off loss of $460.3M impacting its April 2 2022 financial results.

Growing Profit Margin: SWK's current net profit margins (7.9%) are lower than last year (10.8%).

Past Earnings Growth Analysis

Earnings Trend: SWK's earnings have grown by 8.3% per year over the past 5 years.

Accelerating Growth: SWK's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SWK had negative earnings growth (-12.5%) over the past year, making it difficult to compare to the Machinery industry average (24%).

Return on Equity

High ROE: SWK's Return on Equity (13.8%) is considered low.

Discover strong past performing companies

Financial Health

How is Stanley Black & Decker's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SWK's short term assets ($9.7B) do not cover its short term liabilities ($11.0B).

Long Term Liabilities: SWK's short term assets ($9.7B) exceed its long term liabilities ($9.0B).

Debt to Equity History and Analysis

Debt Level: SWK's net debt to equity ratio (109.9%) is considered high.

Reducing Debt: SWK's debt to equity ratio has increased from 73.3% to 111.6% over the past 5 years.

Debt Coverage: SWK's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: SWK's interest payments on its debt are well covered by EBIT (9.9x coverage).

Balance Sheet

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Dividend

What is Stanley Black & Decker current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.89%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SWK's dividend (2.89%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: SWK's dividend (2.89%) is low compared to the top 25% of dividend payers in the US market (4.23%).

Stability and Growth of Payments

Stable Dividend: SWK's dividends per share have been stable in the past 10 years.

Growing Dividend: SWK's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (37.6%), SWK's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: SWK is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

7.4yrs

Average management tenure

CEO

Jim Loree (63 yo)

5.83yrs

Tenure

US$13,167,893

Compensation

Mr. James M. Loree, also known as Jim, has been the Chief Executive Officer of Stanley Black & Decker, Inc. since August 2016. Mr. Loree had been the President of Stanley Black & Decker, Inc. since January...

CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD13.17M) is about average for companies of similar size in the US market ($USD13.43M).

Compensation vs Earnings: Jim's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: SWK's management team is seasoned and experienced (7.4 years average tenure).

Board Members

Experienced Board: SWK's board of directors are considered experienced (6.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/04/02
Annual Earnings	2022/01/01