Stanley Black & Decker, the world’s largest tool company continues its strategic transformation while maintaining its dominant position in the global tools market.
The firm’s strong dividend history offers investors stable income while they wait for the full benefits of the transformation to materialize. Forward earnings are projected at $5.09 per share for the coming year, meaning the company offers both growth potential and reasonable value in an uncertain economy.
Meanwhile, the stock trades cheaply at just 14.3 times the company’s forward earnings forecast.
STANLEY BLACK & DECKER INC. (New York symbol SWK; www.stanleyblackanddecker.com) is one of the world’s largest makers of hand and power tools. In addition to brands Stanley and Black & Decker, it also offers top-selling brands DeWalt, Lenox, Irwin and Craftsman.
The stock took a big drop in early April 2025 on investor fears that U.S. tariffs on China would hurt its profits. It currently gets around 15% of its products from China, down from 40% eight years ago. Tariffs and increasing economic uncertainty could also slow demand for new tools by industrial customers like homebuilders, as well as individual consumers. Stanley plans to shift more of its production away from China, which should help offset the tariff impact.
However, though, the shares recovered almost all of that decline in early May after President Trump said talks with China had resulted in a “total reset” in trade terms between the U.S and China. The talks in Switzerland resulted in significant cuts to tariffs that had been put in place on both sides. The U.S. said it would lower those tariffs from 145% to 30%, while China’s retaliatory tariffs on U.S. goods would drop to 10% from 125%.
Meanwhile, due to recent asset sales, including its Stanley Infrastructure business, which makes tools for industrial users, the company’s revenue declined 0.4% in the fourth quarter of 2024, to $3.72 billion from $3.74 billion a year earlier. Excluding divestitures and currency movements, sales increased by 3% in the quarter. Thanks to savings from a cost-cutting plan, the company earned $1.49 a share (or a total of $226.0 million), up 62.0% from $0.92 a share (or $138.0 million).
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Stanley’s strategic transformation shows results in operational excellence
Stanley is currently restructuring its operations, which includes closing factories and shrinking the number of products it makes. The plan should cut $1.5 billion from its annual costs in 2024. Those annual savings should rise to $2.0 billion by the end of 2025.
The plan should also lift its gross profit margin (gross profits divided by revenue—the higher, the better) from about 30% in 2024 to between 35% and 37% in 2027 and beyond.
All in all, the saving should also lift Stanley’s earnings by 17% in 2025 to $5.09 a share. The stock trades at just 14.3 times the earnings estimate.
Those higher earnings will also let Stanley keep raising your dividend. With the September 2024 payment, it increased your quarterly dividend by 1.2%, to $0.82 a share instead of $0.81. The annual rate of $3.28 a share yields 4.5%. The company has paid regular dividends for 148 years and has now raised the annual rate each year for the past 57 years.
Recommendation in Dividend Advisor: Stanley Black & Decker Inc. is a buy.
