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

Introduction

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
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.

 

Please follow and like us:

Leave a Reply