STANLEY BLACK & DECKER INC (SWK) Stock Fundamental Analysis
NYSE:SWK - New York Stock Exchange, Inc. - US8545021011 - Common Stock - Currency: USD
Taking everything into account, SWK scores 4 out of 10 in our fundamental rating. SWK was compared to 127 industry peers in the Machinery industry. Both the profitability and financial health of SWK have multiple concerns. SWK has a decent growth rate and is not valued too expensively. Finally SWK also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
SWK had positive earnings in the past year.
In the past year SWK had a positive cash flow from operations.
Of the past 5 years SWK 4 years were profitable.
Of the past 5 years SWK 4 years had a positive operating cash flow.
1.2 Ratios
SWK's Return On Assets of 1.62% is on the low side compared to the rest of the industry. SWK is outperformed by 61.42% of its industry peers.
With a Return On Equity value of 4.13%, SWK is not doing good in the industry: 60.63% of the companies in the same industry are doing better.
SWK has a Return On Invested Capital of 4.32%. This is in the lower half of the industry: SWK underperforms 61.42% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SWK is significantly below the industry average of 10.78%.
The 3 year average ROIC (3.22%) for SWK is below the current ROIC(4.32%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.62% | ||
| ROE | 4.13% | ||
| ROIC | 4.32% |
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
SWK has a Profit Margin of 2.40%. This is comparable to the rest of the industry: SWK outperforms 40.94% of its industry peers.
In the last couple of years the Profit Margin of SWK has declined.
SWK has a Operating Margin (6.20%) which is in line with its industry peers.
SWK's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 30.30%, SWK perfoms like the industry average, outperforming 48.03% of the companies in the same industry.
In the last couple of years the Gross Margin of SWK has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.2% | ||
| PM (TTM) | 2.4% | ||
| GM | 30.3% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SWK is destroying value.
Compared to 1 year ago, SWK has more shares outstanding
The number of shares outstanding for SWK remains at a similar level compared to 5 years ago.
The debt/assets ratio for SWK has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 1.85 indicates that SWK is not a great score, but indicates only limited risk for bankruptcy at the moment.
SWK has a Altman-Z score of 1.85. This is in the lower half of the industry: SWK underperforms 70.08% of its industry peers.
The Debt to FCF ratio of SWK is 8.81, which is on the high side as it means it would take SWK, 8.81 years of fcf income to pay off all of its debts.
SWK has a Debt to FCF ratio (8.81) which is in line with its industry peers.
A Debt/Equity ratio of 0.67 indicates that SWK is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.67, SWK is doing worse than 66.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 8.81 | ||
| Altman-Z | 1.85 |
ROIC/WACC0.46
WACC9.29%
2.3 Liquidity
A Current Ratio of 1.10 indicates that SWK should not have too much problems paying its short term obligations.
The Current ratio of SWK (1.10) is worse than 87.40% of its industry peers.
SWK has a Quick Ratio of 1.10. This is a bad value and indicates that SWK is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of SWK (0.36) is worse than 92.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.1 | ||
| Quick Ratio | 0.36 |
3. Growth
3.1 Past
SWK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 88.02%, which is quite impressive.
SWK shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -12.27% yearly.
The Revenue has decreased by -3.04% in the past year.
The Revenue has been growing slightly by 1.25% on average over the past years.
EPS 1Y (TTM)88.02%
EPS 3Y-27.43%
EPS 5Y-12.27%
EPS Q2Q%33.93%
Revenue 1Y (TTM)-3.04%
Revenue growth 3Y0.18%
Revenue growth 5Y1.25%
Sales Q2Q%-3.23%
3.2 Future
SWK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.58% yearly.
The Revenue is expected to grow by 3.23% on average over the next years.
EPS Next Y3%
EPS Next 2Y16.14%
EPS Next 3Y17.58%
EPS Next 5YN/A
Revenue Next Year2.27%
Revenue Next 2Y3.22%
Revenue Next 3Y3.23%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 15.34, the valuation of SWK can be described as correct.
Based on the Price/Earnings ratio, SWK is valued a bit cheaper than 77.95% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.19. SWK is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 11.87 indicates a reasonable valuation of SWK.
Based on the Price/Forward Earnings ratio, SWK is valued cheaply inside the industry as 85.83% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of SWK to the average of the S&P500 Index (35.33), we can say SWK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.34 | ||
| Fwd PE | 11.87 |
4.2 Price Multiples
71.65% of the companies in the same industry are more expensive than SWK, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, SWK is valued cheaper than 81.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.12 | ||
| EV/EBITDA | 10.73 |
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.
SWK's earnings are expected to grow with 17.58% in the coming years. This may justify a more expensive valuation.
PEG (NY)5.11
PEG (5Y)N/A
EPS Next 2Y16.14%
EPS Next 3Y17.58%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.44%, SWK is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.82, SWK pays a better dividend. On top of this SWK pays more dividend than 98.43% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, SWK pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.44% |
5.2 History
The dividend of SWK has a limited annual growth rate of 3.92%.
SWK has been paying a dividend for at least 10 years, so it has 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 135.24% of its income as dividend. This is not a sustainable payout ratio.
SWK's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP135.24%
EPS Next 2Y16.14%
EPS Next 3Y17.58%
69.8
-1.78 (-2.49%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners97.66%
Inst Owner Change0.02%
Ins Owners0.33%
Ins Owner Change4.11%
Market Cap10.80B
Analysts67.5
Price Target87.14 (24.84%)
Short Float %4.9%
Short Ratio2.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.44% |
Yearly Dividend3.2
Dividend Growth(5Y)3.92%
DP135.24%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.14%
Min EPS beat(2)12.45%
Max EPS beat(2)15.84%
EPS beat(4)4
Avg EPS beat(4)18.13%
Min EPS beat(4)12.45%
Max EPS beat(4)28.75%
EPS beat(8)8
Avg EPS beat(8)23.29%
EPS beat(12)11
Avg EPS beat(12)24.11%
EPS beat(16)15
Avg EPS beat(16)21.57%
Revenue beat(2)2
Avg Revenue beat(2)1.76%
Min Revenue beat(2)0.58%
Max Revenue beat(2)2.95%
Revenue beat(4)2
Avg Revenue beat(4)0.1%
Min Revenue beat(4)-2.36%
Max Revenue beat(4)2.95%
Revenue beat(8)3
Avg Revenue beat(8)-0.56%
Revenue beat(12)5
Avg Revenue beat(12)-0.96%
Revenue beat(16)5
Avg Revenue beat(16)-3.26%
PT rev (1m)0%
PT rev (3m)-15.32%
EPS NQ rev (1m)19.79%
EPS NQ rev (3m)-55.68%
EPS NY rev (1m)3.82%
EPS NY rev (3m)-14.61%
Revenue NQ rev (1m)-0.42%
Revenue NQ rev (3m)-0.05%
Revenue NY rev (1m)-0.18%
Revenue NY rev (3m)1.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.34 | ||
| Fwd PE | 11.87 | ||
| P/S | 0.71 | ||
| P/FCF | 14.12 | ||
| P/OCF | 9.66 | ||
| P/B | 1.22 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.73 |
EPS(TTM)4.55
EY6.52%
EPS(NY)5.88
Fwd EY8.42%
FCF(TTM)4.94
FCFY7.08%
OCF(TTM)7.23
OCFY10.35%
SpS98.51
BVpS57.15
TBVpS-18.15
PEG (NY)5.11
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.62% | ||
| ROE | 4.13% | ||
| ROCE | 5.85% | ||
| ROIC | 4.32% | ||
| ROICexc | 4.41% | ||
| ROICexgc | 14.11% | ||
| OM | 6.2% | ||
| PM (TTM) | 2.4% | ||
| GM | 30.3% | ||
| FCFM | 5.02% |
ROA(3y)1.42%
ROA(5y)3.07%
ROE(3y)3.61%
ROE(5y)7.25%
ROIC(3y)3.22%
ROIC(5y)4.92%
ROICexc(3y)3.28%
ROICexc(5y)5.08%
ROICexgc(3y)10%
ROICexgc(5y)18.21%
ROCE(3y)4.3%
ROCE(5y)6.57%
ROICexcg growth 3Y-9.54%
ROICexcg growth 5Y-20.54%
ROICexc growth 3Y-15.81%
ROICexc growth 5Y-12.99%
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%
F-Score8
Asset Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 8.81 | ||
| Debt/EBITDA | 3.87 | ||
| Cap/Depr | 61.14% | ||
| Cap/Sales | 2.32% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 73.44% | ||
| Profit Quality | 209.39% | ||
| Current Ratio | 1.1 | ||
| Quick Ratio | 0.36 | ||
| Altman-Z | 1.85 |
F-Score8
WACC9.29%
ROIC/WACC0.46
Cap/Depr(3y)68.97%
Cap/Depr(5y)71.42%
Cap/Sales(3y)2.53%
Cap/Sales(5y)2.67%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)88.02%
EPS 3Y-27.43%
EPS 5Y-12.27%
EPS Q2Q%33.93%
EPS Next Y3%
EPS Next 2Y16.14%
EPS Next 3Y17.58%
EPS Next 5YN/A
Revenue 1Y (TTM)-3.04%
Revenue growth 3Y0.18%
Revenue growth 5Y1.25%
Sales Q2Q%-3.23%
Revenue Next Year2.27%
Revenue Next 2Y3.22%
Revenue Next 3Y3.23%
Revenue Next 5YN/A
EBIT growth 1Y26.78%
EBIT growth 3Y-22.72%
EBIT growth 5Y-12.18%
EBIT Next Year20.45%
EBIT Next 3Y15.84%
EBIT Next 5YN/A
FCF growth 1Y179.37%
FCF growth 3Y73.57%
FCF growth 5Y-6.98%
OCF growth 1Y321.5%
OCF growth 3Y18.63%
OCF growth 5Y-5.97%