Why Stanley Black & Decker is a Solid Long Term Dividend Stock

Stanley Black and Decker

When it comes to becoming an investor in the stock market, there are quite a few ways to enter. You will first need to decide what type of investment you are interested in. For some, this entails taking the risk associated with buying shares in the anticipation that the price will increase quickly and can be sold for a profit. The downside to this is that the share price can also dramatically, leaving you cash short. Others are income investors, and they want a return on their investment. The home improvement industry continues to boom, so this is where many look today.

Income investors are not as concerned with a rapid increase in the price of the stock, as they are going to hang onto it for the long term. Income investors are looking for companies that have a history of paying dividends on a consistent basis. This allows them to keep their shares, while be assured that they will receive a per share return once of several times a year. Stanley Black & Decker has long been considered a solid long term dividend stock, and it still worthy of your consideration. Here are some reasons why that is the case.

Stanley Black & Decker

If you are a homeowner, you likely are aware of Stanley Black & Decker. This is a brand name that has been recognized around the country for decades. This is a good indicator for income investors. When a brand is so instantly recognizable at Stanley Black & Decker, it can withstand a lot of what the economy throws at it. Because this brand is in the home improvement industry, it is particularly poised for success. This is due to the fact that homeowners and contractors are always in need of tools.

Combined, Stanley Black & Decker makes tools. They have done this well for decades. This has contributed to the 51 years and a continuing streak of paying dividends. In fact, the amount of those dividends continue to grow. When you are an income investor looking at a company who has consistently paid out dividends for more than five decades, it is hard to not get excited. Beyond that the share price is reasonable. Since you are looking to hold onto this stock for the long term, you can count on the income potential that it provides, without having to really worry about a dipping share price at some point in the future.

As society has evolved, Stanley Black & Decker has not remained static. In fact, it has continued to acquire more brands and move into various industrial markets over the years. This has caused their gradual and sustained growth. This bodes well for the future of the company as well.

Some Figures

As we mentioned, Stanley Black & Decker is a maker of tools, power tools, and security systems. They have stayed focused on these areas and it has served them well through their decades of existence. They are actually headquartered in Connecticut. Through the years, their annual revenues have continued to grow. That current stands at $13 billion. That is quite impressive. Digging a bit deeper, we find that 70 percent of this revenue comes from the tools and storage sector of its business, while the industrial and security sectors account for 15 percent of annual revenue each. That shows the potential for growth, as does the fact that more than half of the revenue for Stanley Black & Decker comes from sales in the United States. This provides great potential for tapping into the global market.

The past decade has seen Stanley Black & Decker grow rather strongly. This is due to the aggressive nature of their current plan for acquit ions. This has allowed the company to continue to fill out its portfolio of brands. They are buying up companies that are solid produces in the three respective fields that they have chosen to specialize in. Tool brands that are in direct competition with Stanley Black & Decker have been a recent target of acquisition, which is a strategy that has largely proven successful. As such, earnings continue to increase and this has lead to increased and sustained dividends payments as well.

Combined, Stanley Black & Decker makes tools. They have done this well for decades. This has contributed to the 51 years and the continuing streak of paying dividends. In fact, the amount of those dividends continue to grow. When you are an income investor looking at a company who has consistently paid out dividends for more than five decades, it is hard to not get excited. Beyond that the share price is reasonable. Since you are looking to hold onto this stock for the long term, you can count on the income potential that it provides, without having to really worry about a dipping share price at some point in the future.

The Outlook For Dividend Growth

This is the area that income investors are most interested in. Stanley Black & Decker has long been considered a model in this area. Most companies that have been around as they have cannot approach the record of consistent dividend payments that they have been able to meet. That streak currently stands at 51 years, and it shows no signs of stopping anytime soon. You will find that the current dividend, paid quarterly, stands at $2.64 per share.

The dividend payments have actually grown steadily for the better part of the past decade. This is an annualized rate of 7.1 percent. Stanley Black & Decker has tremendous cash flow, which means that its dividend payments only account for 40 percent of available money on hand. That is under 40 percent, which is quite respectable. This leaves a lot of room for more even more growth in terms of dividends in the coming years, with the hope that it will continue to be able to beat inflation.

Conclusion

Stanley Black & Decker is a solid long term dividend stock no matter how you look at it. They have been able to redefine their operating strategy when necessary, and they have eliminated competition to the tune of growing their own business. Income investors should see a friend with this stock.


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