Stanley Black & Decker (NYSE:SWK) and Columbus McKinnon (NASDAQ:CMCO) are both industrial products companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Stanley Black & Decker and Columbus McKinnon, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Stanley Black & Decker | 0 | 4 | 9 | 0 | 2.69 |
Columbus McKinnon | 0 | 0 | 4 | 0 | 3.00 |
Stanley Black & Decker presently has a consensus target price of $191.1538, indicating a potential downside of 5.10%. Columbus McKinnon has a consensus target price of $52.40, indicating a potential downside of 0.80%. Given Columbus McKinnon's stronger consensus rating and higher possible upside, analysts clearly believe Columbus McKinnon is more favorable than Stanley Black & Decker.
Risk and Volatility
Stanley Black & Decker has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500. Comparatively, Columbus McKinnon has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500.
Profitability
This table compares Stanley Black & Decker and Columbus McKinnon's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Stanley Black & Decker | 6.98% | 15.05% | 5.46% |
Columbus McKinnon | 2.54% | 8.20% | 3.53% |
Insider & Institutional Ownership
85.4% of Stanley Black & Decker shares are owned by institutional investors. Comparatively, 97.0% of Columbus McKinnon shares are owned by institutional investors. 1.0% of Stanley Black & Decker shares are owned by company insiders. Comparatively, 2.2% of Columbus McKinnon shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Dividends
Stanley Black & Decker pays an annual dividend of $2.80 per share and has a dividend yield of 1.4%. Columbus McKinnon pays an annual dividend of $0.24 per share and has a dividend yield of 0.5%. Stanley Black & Decker pays out 33.3% of its earnings in the form of a dividend. Columbus McKinnon pays out 8.6% 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 54 consecutive years and Columbus McKinnon has raised its dividend for 1 consecutive years. Stanley Black & Decker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Stanley Black & Decker and Columbus McKinnon's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Stanley Black & Decker | $14.44 billion | 2.24 | $955.80 million | $8.40 | 23.98 |
Columbus McKinnon | $809.16 million | 1.56 | $59.67 million | $2.78 | 19.00 |
Stanley Black & Decker has higher revenue and earnings than Columbus McKinnon. Columbus McKinnon is trading at a lower price-to-earnings ratio than Stanley Black & Decker, indicating that it is currently the more affordable of the two stocks.
Summary
Stanley Black & Decker beats Columbus McKinnon on 10 of the 17 factors compared between the two stocks.