Stanley Black & Decker (NYSE: SWK) and Simpson Manufacturing (NYSE:SSD) are both industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.
Stanley Black & Decker pays an annual dividend of $2.52 per share and has a dividend yield of 1.6%. Simpson Manufacturing pays an annual dividend of $0.84 per share and has a dividend yield of 1.5%. Stanley Black & Decker pays out 33.8% of its earnings in the form of a dividend. Simpson Manufacturing pays out 42.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Stanley Black & Decker has raised its dividend for 50 consecutive years and Simpson Manufacturing has raised its dividend for 4 consecutive years. Stanley Black & Decker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Stanley Black & Decker and Simpson Manufacturing’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Stanley Black & Decker||$12.75 billion||1.90||$1.23 billion||$7.45||21.12|
|Simpson Manufacturing||$977.03 million||2.74||$92.61 million||$1.98||28.92|
Stanley Black & Decker has higher revenue and earnings than Simpson Manufacturing. Stanley Black & Decker is trading at a lower price-to-earnings ratio than Simpson Manufacturing, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and price targets for Stanley Black & Decker and Simpson Manufacturing, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Stanley Black & Decker||0||3||15||0||2.83|
Stanley Black & Decker presently has a consensus target price of $181.13, indicating a potential upside of 15.09%. Simpson Manufacturing has a consensus target price of $63.33, indicating a potential upside of 10.61%. Given Stanley Black & Decker’s stronger consensus rating and higher probable upside, analysts plainly believe Stanley Black & Decker is more favorable than Simpson Manufacturing.
Institutional and Insider Ownership
84.0% of Stanley Black & Decker shares are held by institutional investors. Comparatively, 88.5% of Simpson Manufacturing shares are held by institutional investors. 0.7% of Stanley Black & Decker shares are held by insiders. Comparatively, 0.4% of Simpson Manufacturing shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Risk and Volatility
Stanley Black & Decker has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Simpson Manufacturing has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.
This table compares Stanley Black & Decker and Simpson Manufacturing’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Stanley Black & Decker||9.62%||15.89%||5.91%|
Stanley Black & Decker beats Simpson Manufacturing on 12 of the 17 factors compared between the two stocks.
Stanley Black & Decker Company Profile
Stanley Black & Decker, Inc. is a global provider of hand tools, power tools and related accessories, mechanical access solutions, such as automatic doors and commercial locking systems, electronic security and monitoring systems, healthcare solutions, engineered fastening systems, and products and services for various industrial applications. The Company’s segments include Tools & Storage, Security and Industrial. Its Tools & Storage segment consists of the Power Tools and Hand Tools, Accessories and Storage businesses. Its Security segment consists of the Convergent Security Solutions and Mechanical Access Solutions businesses. Its Industrial segment consists of the Engineered Fastening and Infrastructure businesses. It offers brands, such as SIDCHROME, AeroScout, DEWALT, Newell Tools and Craftsman, Irwin, Lenox, Craftsman, BLACK+DECKER, SONITROL, Warren, GRIPCO, Porter-Cable, BOSTITCH and WanderGuard.
Simpson Manufacturing Company Profile
Simpson Manufacturing Co., Inc., through its subsidiaries, designs, engineers, manufactures, and sells building construction products. The company offers wood construction products, including connectors, truss plates, fastening systems, fasteners, and pre-fabricated lateral systems used in light-frame construction; and concrete construction products comprising adhesives, specialty chemicals, mechanical anchors, carbide drill bits, powder actuated tools, and fiber reinforced materials for use in concrete, masonry, and steel construction, as well as for concrete repair, protection, and strengthening applications. It also provides connectors for wood framing and cold formed steel applications; screws, tools, and products for deck, fascia, and drywall applications; mechanical anchors and epoxy adhesives; fiber reinforced cementitious mortar products; and decorative hardware and connectors for outdoor living spaces. The company markets its products to the residential construction, light industrial and commercial construction, remodeling, and do-it-yourself markets in the United States, Canada, France, the United Kingdom, Germany, Denmark, Switzerland, Portugal, Poland, the Netherlands, Belgium, Sweden, Norway, Australia, New Zealand, South Africa, China, Taiwan, and Vietnam, as well as in Mexico, Chile, and the Middle East. Simpson Manufacturing Co., Inc. was founded in 1956 and is headquartered in Pleasanton, California.
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