STANLEY BLACK & DECKER INC (SWK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SWK - US8545021011 - Common Stock
82.48 USD
-1.25 (-1.49%)
82.48 USD
0 (0%)
Overall SWK gets a fundamental rating of 4 out of 10. We evaluated SWK against 132 industry peers in the Machinery industry. Both the profitability and financial health of SWK have multiple concerns. SWK has a correct valuation and a medium growth rate. Finally SWK also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- SWK had positive earnings in the past year.
- SWK had a positive operating cash flow in the past year.
- Of the past 5 years SWK 4 years were profitable.
- SWK had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
- SWK has a Return On Assets (2.02%) which is in line with its industry peers.
- SWK has a Return On Equity (4.89%) which is in line with its industry peers.
- SWK has a Return On Invested Capital of 4.78%. This is in the lower half of the industry: SWK underperforms 61.36% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for SWK is significantly below the industry average of 10.24%.
- The 3 year average ROIC (3.22%) for SWK is below the current ROIC(4.78%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.02% | ||
| ROE | 4.89% | ||
| ROIC | 4.78% |
ROA(3y)1.42%
ROA(5y)3.07%
ROE(3y)3.61%
ROE(5y)7.25%
ROIC(3y)3.22%
ROIC(5y)4.92%
1.3 Margins
- Looking at the Profit Margin, with a value of 2.89%, SWK is in line with its industry, outperforming 43.18% of the companies in the same industry.
- In the last couple of years the Profit Margin of SWK has declined.
- SWK's Operating Margin of 6.88% is in line compared to the rest of the industry. SWK outperforms 43.18% of its industry peers.
- In the last couple of years the Operating Margin of SWK has declined.
- SWK's Gross Margin of 30.14% is in line compared to the rest of the industry. SWK outperforms 48.48% of its industry peers.
- In the last couple of years the Gross Margin of SWK has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.88% | ||
| PM (TTM) | 2.89% | ||
| GM | 30.14% |
OM growth 3Y-22.86%
OM growth 5Y-13.27%
PM growth 3Y-44.11%
PM growth 5Y-21.97%
GM growth 3Y-3.73%
GM growth 5Y-2.24%
2. Health
2.1 Basic Checks
- SWK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- Compared to 1 year ago, SWK has more shares outstanding
- Compared to 5 years ago, SWK has about the same amount of shares outstanding.
- The debt/assets ratio for SWK has been reduced compared to a year ago.
2.2 Solvency
- SWK has an Altman-Z score of 2.03. This is not the best score and indicates that SWK is in the grey zone with still only limited risk for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 2.03, SWK is doing worse than 64.39% of the companies in the same industry.
- The Debt to FCF ratio of SWK is 17.89, which is on the high side as it means it would take SWK, 17.89 years of fcf income to pay off all of its debts.
- SWK's Debt to FCF ratio of 17.89 is on the low side compared to the rest of the industry. SWK is outperformed by 64.39% of its industry peers.
- SWK has a Debt/Equity ratio of 0.67. This is a neutral value indicating SWK is somewhat dependend on debt financing.
- SWK's Debt to Equity ratio of 0.67 is on the low side compared to the rest of the industry. SWK is outperformed by 65.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 17.89 | ||
| Altman-Z | 2.03 |
ROIC/WACC0.52
WACC9.28%
2.3 Liquidity
- A Current Ratio of 1.11 indicates that SWK should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.11, SWK is doing worse than 84.85% of the companies in the same industry.
- SWK has a Quick Ratio of 1.11. This is a bad value and indicates that SWK is not financially healthy enough and could expect problems in meeting its short term obligations.
- SWK has a Quick ratio of 0.35. This is amonst the worse of the industry: SWK underperforms 91.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.35 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 25.33% over the past year.
- SWK shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -12.27% yearly.
- SWK shows a decrease in Revenue. In the last year, the revenue decreased by -1.40%.
- Measured over the past years, SWK shows a small growth in Revenue. The Revenue has been growing by 1.25% on average per year.
EPS 1Y (TTM)25.33%
EPS 3Y-27.43%
EPS 5Y-12.27%
EPS Q2Q%17.21%
Revenue 1Y (TTM)-1.4%
Revenue growth 3Y0.18%
Revenue growth 5Y1.25%
Sales Q2Q%0.13%
3.2 Future
- Based on estimates for the next years, SWK will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.07% on average per year.
- Based on estimates for the next years, SWK will show a small growth in Revenue. The Revenue will grow by 4.37% on average per year.
EPS Next Y5.29%
EPS Next 2Y15.14%
EPS Next 3Y15.62%
EPS Next 5Y18.07%
Revenue Next Year-0.17%
Revenue Next 2Y1.18%
Revenue Next 3Y2.03%
Revenue Next 5Y4.37%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 17.36 indicates a rather expensive valuation of SWK.
- 82.58% of the companies in the same industry are more expensive than SWK, based on the Price/Earnings ratio.
- SWK is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 14.27, the valuation of SWK can be described as correct.
- SWK's Price/Forward Earnings ratio is rather cheap when compared to the industry. SWK is cheaper than 88.64% of the companies in the same industry.
- SWK's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.36 | ||
| Fwd PE | 14.27 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, SWK is valued a bit cheaper than the industry average as 75.76% of the companies are valued more expensively.
- SWK's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.56 | ||
| EV/EBITDA | 11.42 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SWK does not grow enough to justify the current Price/Earnings ratio.
- A more expensive valuation may be justified as SWK's earnings are expected to grow with 15.62% in the coming years.
PEG (NY)3.28
PEG (5Y)N/A
EPS Next 2Y15.14%
EPS Next 3Y15.62%
5. Dividend
5.1 Amount
- SWK has a Yearly Dividend Yield of 3.97%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 0.98, SWK pays a better dividend. On top of this SWK pays more dividend than 96.97% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, SWK pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.97% |
5.2 History
- The dividend of SWK has a limited annual growth rate of 3.92%.
- SWK has paid a dividend for at least 10 years, which is a reliable track record.
- SWK has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.92%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
- SWK pays out 113.61% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of SWK is growing, but earnings are growing more, so the dividend growth is sustainable.
DP113.61%
EPS Next 2Y15.14%
EPS Next 3Y15.62%
STANLEY BLACK & DECKER INC / SWK FAQ
Can you provide the ChartMill fundamental rating for STANLEY BLACK & DECKER INC?
ChartMill assigns a fundamental rating of 4 / 10 to SWK.
What is the valuation status for SWK stock?
ChartMill assigns a valuation rating of 4 / 10 to STANLEY BLACK & DECKER INC (SWK). This can be considered as Fairly Valued.
What is the profitability of SWK stock?
STANLEY BLACK & DECKER INC (SWK) has a profitability rating of 3 / 10.
What is the valuation of STANLEY BLACK & DECKER INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for STANLEY BLACK & DECKER INC (SWK) is 17.36 and the Price/Book (PB) ratio is 1.42.
What is the earnings growth outlook for STANLEY BLACK & DECKER INC?
The Earnings per Share (EPS) of STANLEY BLACK & DECKER INC (SWK) is expected to grow by 5.29% in the next year.