Stanley Black & Decker, Inc. (SWK)

Fundamental Analysis

Stanley Black & Decker is a company that manufactures tools and implements for factories and end users (shop equipment, construction equipment, etc.).

The company’s history dates back to 1843 when it began selling tools as Stanley’s Bolt Manufactory. The company as it is today was formed in 2010 when The Stanley Works and Black & Decker merged. The company is headquartered in New Britain, Connecticut, USA.

The company is a member of the S&P 500 index. It employs more than 50,000 people worldwide.

The group includes several dozen brands such as Black & Decker, DeWalt, Stanley,

The company divides its products into two main sections: Outdoor Tools and Equipment (sales of USD 13.4 billion) and Industrial (sales of USD 2.4 billion).

The company’s turnover is more than USD 15 billion. The dividend has been paid continuously for 148 years. It is now paid quarterly.

62% of revenue is from the US, 16% from Europe.

The company has a gross margin of 28%.

For 2024, the company expects growth in the order of percentages.

Results

For 3Q 2024, the company’s sales ($3.8 billion) are 5% lower than in 2023. This is due to lower demand, especially for domestic tools, from end customers.

The margin, on the other hand, was 29.9%.

The company had cash on hand of about USD 200 million which reduced its debt by about USD 100 million.

The Industrial segment reported lower sales of 18%.

Technical analysis

Volume is at 1 million shares traded per day. It is a liquid stock.

The moving averages are in an uptrend, but the spread is declining rapidly. This is mainly due to the price decline and gap of recent weeks.

The RSI is in an oversold zone.

Over the past year the stock price has risen and fallen, but the current yield is 0%. This is less than the S&P500 has earned.

Conclusion

Tool retailer SWK has very high margins on its products, which is good. However, the latest quarterly results didn’t go quite as well. The stock responded by falling.

SWK has a high proportion of sales from the US only. The geographic focus is thus quite narrow. Despite the neutral share price, the company still pays a stable dividend.