Pache.co Information Technologies

Joe Raedle

Stanley Black & Decker (NYSE:SWK) is a stock that experienced a strong rally since the corona crisis until mid-2021, after which the share price plummeted until now.

Until mid-2021, the stock price rose over the past 10 years. Its stock price almost paralleled the S&P 500 but is currently down. This was due to mediocre quarterly earnings and particularly poor guidance. The stock’s valuation metrics are favorable due to the sharp decline, which may provide a great buying opportunity. Although the macroeconomic outlook looks weak, I expect the stock to move sideways at first, after which the stock will start a strong advance when the quarterly figures show a positive outlook.

Company Overview

Company Overview (Stanley Black & Decker 2021 Annual Report)

Stanley Black & Decker supplies industrial tools to both businesses and consumers worldwide. The company is divided into 2 segments: Tools & Outdoor, and the Industrial segment. The Tools & Outdoor segment is the largest segment, generating 84% of total sales. Tools & Outdoor includes well-known brands such as Stanley, DeWalt, Craftsman and Black + Decker. Tools & Outdoor is divided into Power Tools (power tools and equipment, pneumatic tools and fasteners), Outdoor Power Equipment (lawn and garden products and related accessories, and Hand Tools, Storage & Accessories.

The Industrial segment provides fastening systems and products to companies in the automotive, manufacturing, electronics and other industries. It is also engaged in the sale and rental of custom pipe handling, welding and coating equipment for use in construction and other infrastructure solutions in the oil and natural gas pipeline industry.

Third Quarter Earnings Came In Mixed

More Streamlined Company With Great Franchises (Stanley Black & Decker 3Q22 Investor Presentation)

Earnings for the third quarter were mixed. Revenue was up 9.0% year over year, but earnings per share lagged with a decline of 73% year over year. Of particular concern was that free cash flow was deep in the red at -$2.3B on revenue of $4.12B.

The cause of the mixed earnings was inflationary pressures due to weakened consumer demand. Stanley Black & Decker acted quickly, cutting SG&A expenses by $65 million this quarter. During the quarter, the company cut about 1,000 finance jobs to reduce costs. The goal is to further reduce costs to achieve total cumulative cost savings of $2B ($1B annualized) by 2025. The company plans to achieve the cost savings through supply chain and SG&A optimization. The cost savings should lead to a gross margin of more than 35% by 2025. The current gross margin is 25% as of September 2022. Inventories fell to $6.3B from $6.6B and the CEO Donald Allan Jr. said it will not reduce headcount further.

Looking at the big picture, Stanley Black & Decker grew strongly in 2021 due to the housing boom while the Fed cut interest rates. Sales rose 20%, net income rose 37% and earnings per share increased 16% year over year.

SWK Financial Results (SEC and Author’s Own Graphical Visualization)

The Tools & Outdoors segment is expected to experience a decline in sales due to weak consumer confidence and rising inflation. I wrote in an earlier article that a recession is imminent in the United States. The yield spread is deep in the red, indicating that a recession is imminent within now and a year. Sales in the Tools & Outdoors segment come primarily from consumers, and they are the most affected during a recession. The large share of 84% of total sales indicates that the risks are mainly in this segment. Sales in the Industrial segment are expected to increase by high single digit to low double digit.

Stanley Black & Decker lowered its earnings per share forecast for fiscal 2022 from $5.00 to $6.00 per share to a range of $4.15 to $4.65 per share. Free cash flow was deep in the red in the third quarter, but the company expects free cash flow in the green for the final quarter of 2022. Analysts on the Seeking Alpha SWK ticker page expect earnings per share to rise 13% after fiscal 2023.

Stanley Black & Decker 2022 Guidance (3Q22 Investor Presentation)

Stanley Black & Decker Offers A High Dividend Yield Of 4.2%

Dividends per share have increased at an average annual rate of 6.1% over the past 10 years. Dividend payout ratio is 0.30 for fiscal year 2021, so dividend payments are manageable. Free cash flow was deep in the red this fiscal year, which is a major risk to the dividend payout. Since the company expects free cash flow to be positive in the fourth quarter, I see some improvement in its financial performance.

The dividend per share is currently listed at $3.20, representing a dividend yield of 4.2%. Looking ahead, the consensus dividend for fiscal 2022 is $3.14 and for fiscal 2023 is $3.22 (up 2.5%). Adjusted earnings per share is expected to be $4.38 and $4.95 per share, so the dividend should be well covered by the company’s earnings.

Dividend Growth History (SWK Seeking Alpha Ticker Page)

Valuation Extremely Favorable

I prefer to use the ratio of enterprise value to free cash flow to understand the valuation of the company. Since the company has negative free cash flow this year, the EV/FCF ratio seems unrepresentative for now. In 2017 and 2018, the gross margin was around 35%, and since the company is targeting a gross margin of 35+% by 2025. Therefore, I see the EV/Sales ratio as a good choice to chart the stock’s valuation and compare it to the value from 2017 and 2018.

The graph is drawn from before 1990 to the present to show that the median EV/Sales ratio increased during a period when interest rates generally decreased. Now the EV/Sales ratio is almost at 2008 levels, this indicates that the company is extremely favorably valued.

Although there are significant risks associated with investing in the stock because of the lowered outlook, this could be a good buying opportunity now that the company is lowering its costs and improving its gross margin. Management is strong and acts quickly to mitigate potential future losses and strives to improve its financial position. The strong management, high dividend and cheap valuation make the stock worth buying.

Key Takeaway

Tried the cheaper non branded ones. Bought these and they fit straight into my Makita. Plenty available around. They also have a small pack on website for 7.98.

Accretive Acquisitions Strengthen Stanley Black & Decker Portfolio in $25 Billion-Plus Outdoor Power Equipment Industry  

New Britain, Connecticut, December 1, 2021… Stanley Black & Decker (NYSE: SWK) today announced that it has successfully completed the acquisition of two leading companies in the growing outdoor power equipment industry, including purchasing the remaining 80 percent ownership stake in MTD Holdings Inc (“MTD”) and the acquisition of Excel Industries (“Excel”).  These transactions establish Stanley Black & Decker as a U.S. based global leader in outdoor products and complement the Company’s position as the fastest growing provider of cordless electric outdoor power equipment with strong brands such as DEWALT®, CRAFTSMAN® and BLACK+DECKER®.

Stanley Black & Decker’s CEO, James M. Loree commented, “The combination of these two high-quality, complementary businesses with our existing outdoor business creates a powerful growth engine with approximately $4 billion in annual revenue across the $25 billion-plus outdoor power equipment industry. These transactions will be accretive to our 2022 earnings and have the potential of further margin expansion as we integrate these great businesses. Combined, this is a platform well positioned for growth and to lead the electrification of outdoor products with a strong portfolio of iconic brands, industry-leading innovation and extensive engineering and manufacturing capabilities. In addition, the acquisitions add deep customer relationships in retail and more than 2,500 independent equipment dealer outlets serving the professional category.  We welcome the 8,100 associates from MTD and Excel to Stanley Black & Decker and look forward to a seamless integration process.” 

The purchase price for the two transactions totaled $1.9 billion inclusive of standard purchase price adjustments.   

Inspiring people to care for and enjoy the outdoors, MTD is known for innovative and award-winning lawn mowers, snow blowers, trimmers, and outdoor power equipment for both residential and commercial markets. The company was founded in 1932 and is headquartered in Valley City, Ohio. The MTD family of brands includes Cub Cadet®, Troy-Bilt®, Robomow®, Rover®, and WOLF-Garten® – all backed by a strong network of MTD support focused on uncompromising quality, service and value through advanced manufacturing. MTD brands and products can be found in leading mass retailers and independent retail channels, including home improvement and hardware stores, independent dealers, and farm supply stores. MTD has state-of-the-art manufacturing facilities in North America and Europe, and a global distribution network.

Founded and based in Hesston, Kansas, Excel is a leading designer and manufacturer of premium commercial and residential turf equipment under the distinct brands of Hustler Turf Equipment (Hustler) and BigDog Mower Co. (BigDog). In 1964, Excel introduced The Hustler, creating an entirely new product category now known as the zero-turn mower. Excel serves 1,400 active independent equipment dealer outlets that stock, sell and service Hustler and BigDog products in the United States and Canada. 

EPS Outlook

For 2022, the Company continues to expect these acquisitions to contribute approximately $0.50 of EPS accretion.  Stanley Black & Decker is incorporating $0.20 – $0.30 of deal related charges into its full-year 2021 GAAP earnings per share guidance as referenced in our October 28, 2021 earnings release and in an 8K filed on November 12, 2021. Accordingly, the Company is updating GAAP guidance to $9.70 – $10.05 (From $10.00 – $10.25).  There is no change to the full-year 2021 non-GAAP adjusted EPS guidance range of $10.70 – $10.90.

About Stanley Black & Decker

Headquartered in New Britain, Connecticut, Stanley Black & Decker, an S&P 500 company, is a leading $14.5 billion global diversified industrial with 56,000 employees in more than 60 countries who make the tools, products and solutions to deliver on its Purpose, For Those Who Make The World. The Company operates the world’s largest tools and storage business featuring iconic brands such as DEWALT®, STANLEY®, BLACK+DECKER® and CRAFTSMAN®; the world’s second largest commercial electronic security company; and is a global industrial leader of highly engineered solutions within its engineered fastening and infrastructure businesses. Learn more at www.stanleyblackanddecker.com

Investor Contacts:

Dennis Lange
Vice President, Investor Relations
[email protected] 
(860) 827-3833

Cort Kaufman
Director, Investor Relations
[email protected] 
(860) 515-2741

Christina Francis
Director, Investor Relations
[email protected] 
(860) 438-3470

Media Contacts:

Shannon Lapierre
Chief Communications Officer
[email protected]
(860) 259-7669

Debora Raymond
Vice President, Public Relations
[email protected] 
(203) 640-8054

Cautionary Note Regarding Forward-Looking Statements

Stanley Black & Decker makes forward-looking statements in this press release which represent its expectations or beliefs about future events and financial performance. Forward-looking statements are identifiable by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “may” and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Forward looking statements made in this press release, include, but are not limited to, statements concerning: certain forward-looking guidance of earnings per share and projections of the anticipated impact of these acquisitions; MTD and Excel’s business complementing and expanding Stanley Black & Decker’s existing operations; cost and revenue synergies; growth and margin expansion opportunities; anticipated accretion, return on capital and one-time acquisition-related charges; and operational efficiencies.

You are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are not guarantees of future events and involve known and unknown risks, uncertainties and other factors that may cause actual results and performance to be materially different from any future results or performance expressed or implied by such forward-looking statements, including, but not limited to: failure to successfully integrate MTD and Excel and achieve expected cost and revenue synergies; failure to achieve expected growth, margin expansion, accretion or return on capital; or the acquisition-related charges being greater than anticipated.

Forward-looking statements made herein are also subject to risks and uncertainties, described in: Stanley Black & Decker’s 2020 Annual Report on Form 10-K, its subsequently filed Quarterly Reports on Form 10-Q; and other filings Stanley Black & Decker makes with the Securities and Exchange Commission. In addition, actual results could differ materially from those suggested by the forward-looking statements. Stanley Black & Decker makes no commitment to revise or update any forward-looking statements to reflect events or circumstances occurring or existing after the date of any forward-looking statement.

This DEWALT Tool Box, TSTAK II, Flat Top is on sale for $22.97 (Retail $35.33). About this item -Flexible platform of the tool storage allows different combinations -All units of the tool chest can stack on top of the other, […]

Ever wake up so bleary-eyed and unable to function that you can barely get it together to stumble your way into the kitchen and mix a cocktail? Well, have we got a product for you. The Black & Decker Bev does for mixed drinks what Keurig did for coffee, complete with all the pros and cons that the comparison implies.

The $250 Black & Decker Bev “corded cocktail maker” is quite the monstrosity on the countertop, weighing 16 pounds unloaded and measuring 15 inches tall with a footprint of 16 by 18 inches. Six tubes extend downward into liquor bottles that you provide—vodka, gin, whiskey (your choice), rum, and tequila. The sixth hose is used for an included water carafe. 

The secret sauce of the Bev is that it uses K-cup-like capsules to deliver all the other ingredients in the cocktail. So a margarita pod includes lime juice, sweetener, and some type of orange flavoring—through it’s not triple sec, because the pods are nonalcoholic. The tequila for the drink comes from a bottle you load into the machine.

A company called Bartesian, which pioneered the concept and which also makes its own (pricey but elegant) dispenser hardware, is the brains behind all of this. Bartesian makes more than 40 flavoring pods, each producing a different cocktail ranging from the simple old-fashioned to the complex sex on the beach and, yes, even the iconic Long Island iced tea. Eight-packs of pods are $20, and note you don’t get even a single freebie with the Bev.

The Bev is not the most elegant of contraptions, but if you asked me what a Black & Decker-produced cocktail making system would look like, this would probably be what I’d sketch.

Setting up the Bev requires a bit of effort and exposes some of the device’s limitations. A standard Grey Goose bottle is too tall to fit in the machine’s vodka slot, while a Patron tequila bottle has too wide a mouth for the hose’s rubber gasket to attach to it. So sure, you can use whatever spirits you’d like … as long as the bottles are the right size. (You can also pour that Grey Goose into an empty Popov bottle if you want to keep it classy, I suppose.)

The other big catch is that the Bev doesn’t do any shaking or stirring. It dumps the ingredients—at room temperature—into a glass, after which you’re on your own when it comes to chilling them and serving the drink. Initially I dispensed all the ingredients into a shaker filled with ice, then chilled them by shaking and finally depositing into a serving glass, but eventually I learned that stirring drinks in an ice-filled serving glass was far simpler and produced roughly the same results with a lot less cleanup. We aren’t talking about craft cocktails here, so some shortcuts are not going to kill anyone.

This way of working is especially key if you use the Bev in the only way it makes any real sense: As an attraction for a party where people make their own drinks instead of you. Toss a bunch of Bartesian capsules into a bowl, provide some general instructions, and let your guests have fun with it. They’ll surely enjoy the light show the Bev puts on during the dispensing and the ability to “dial your strength” among one of four booziness levels, including virgin—though I would warn you against select the highest level, which can leave you with more than 4.5 ounces of hooch in your glass and a nasty hangover the following day.

I was really hoping that the Bev would do double duty as a push-button booze dispenser, where I could pull a lever and have a shot of whiskey or gin produced without having to deal with a measuring device, but unfortunately the Bev can’t do this simple feat. It’s cocktails or nothing, and the machine doesn’t do anything without a Bartesian pod in place. A simple feature like this would give the device a little extra functionality beyond making the relatively limited set of drinks that Bartesian offers. It probably goes without saying that you can’t add your own recipes to the system.

As for the cocktails, they’re hit and miss. They all veer toward being too sweet—some overwhelmingly so, no matter what strength you select—though in testing a half-dozen different pods, I surprisingly found the cosmopolitan to be the most approachable, followed by the old-fashioned. The Long Island iced tea wasn’t half bad, either, but memory of course gets a bit foggy from that point on.

DeWalt Impact Set complete with Impact Guide Drive and Tictac box. The bits feature an optimised tip geometry to prevent cam-out and breakage.

DeWalt 20V 1/4″ MAX XR Brushless Tool Connect Impact Driver DCF888B

The DCF888 Cordless Impact Driver is based on the latest DeWalt XR Brushless Impact Driver (DCF887). Integrated Bluetooth technology connects to the Tool Connect free mobile app and Inventory Manager web portal so you can track, manage, and customize the tool. With Bluetooth integrated within the tool, you do not need a Tool Connect battery to utilize tracking functionality.

The Tool Connect 3-part inventory management solution includes the app and Inventory Manager web portal that work together to help you better communicate updates from the field to the office. You will get updates regarding the whereabouts of tools, materials, and equipment – meaning your assets are tracked during the day and accountability is placed on appropriate crew members. Use Tool Connect tools along with Tool Connect batteries, Connector, and Tag for a complete inventory management solution.

Amazon is having a sale on Black & Decker Tools and Outdoor Power Tools!  Some of these items may still arrive in time for Christmas, depending on where you live. Make sure you join the Holiday Shopping Deals Facebook Group where we post deals all day long! Want more Amazon Deals?  LOOK HERE. Amazon Prices …