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Stanley Black & Decker Inc.: FAST Graphs Fundamental Valuation by the Numbers Analysis



Stanley Black & Decker (SWK) is a leading manufacturer of hand tools, home security systems, industrial solutions and general hardware.  In the following analyze out loud video I will illustrate that this Dividend Aristocrat has generated an above-average record of operating growth.  As a result, the company has also produced dividend growth averaging 5.8% per annum since 1999.

Moreover, Stanley Black & Decker was an overvalued Dividend Aristocrat in 2015, 2016 and 2017.  However, since the beginning of 2018, the company’s stock price has fallen roughly 20%.  Although this has created a better value than we’ve seen in several years, I do think the stock remains moderately overvalued.  On the other hand, if the company meets future expectations and the market values the stock at historical norms, then Stanley Black & Decker would represent an attractive dividend growth stock at current levels.

Therefore, in the following video I will take a by the numbers look at Stanley Black & Decker, to include a resurgence in earnings growth that has transpired since the beginning of 2013.  Growth over this timeframe has been better than the long-term historical average which likely explains why it became overvalued the last couple years, and perhaps why its current valuation might make economic sense today.

Summary and Conclusions

I believe that Stanley Black & Decker is a Dividend Aristocrat offering the potential for above-average total return over the next several years.  Although the current dividend yield is moderate, its expected operating growth should also translate into continuous dividend growth.  I see the stock as a fairly valued long-term investment opportunity with an above-average total return potential through a combination of sound valuation, dividend growth and capital appreciation.

Disclosure:  Long SWK
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