Stanley Black & Decker (NYSE:SWK) and Valmont Industries (NYSE:VMI) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.
Risk & 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, Valmont Industries has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.
Profitability
This table compares Stanley Black & Decker and Valmont Industries' 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% |
| Valmont Industries | 5.06% | 14.25% | 5.82% |
Earnings & Valuation
This table compares Stanley Black & Decker and Valmont Industries' 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 | $14.44 billion | 2.25 | $955.80 million | $8.40 | 24.04 |
| Valmont Industries | $2.77 billion | 1.82 | $153.77 million | $7.06 | 33.48 |
Stanley Black & Decker has higher revenue and earnings than Valmont Industries. Stanley Black & Decker is trading at a lower price-to-earnings ratio than Valmont Industries, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Stanley Black & Decker and Valmont Industries, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Stanley Black & Decker | 0 | 4 | 9 | 0 | 2.69 |
| Valmont Industries | 0 | 1 | 2 | 0 | 2.67 |
Stanley Black & Decker currently has a consensus target price of $189.3077, suggesting a potential downside of 6.24%. Valmont Industries has a consensus target price of $176.50, suggesting a potential downside of 25.32%. Given Stanley Black & Decker's stronger consensus rating and higher probable upside, research analysts clearly believe Stanley Black & Decker is more favorable than Valmont Industries.
Institutional and Insider Ownership
85.4% of Stanley Black & Decker shares are owned by institutional investors. Comparatively, 85.3% of Valmont Industries shares are owned by institutional investors. 1.0% of Stanley Black & Decker shares are owned by company insiders. Comparatively, 3.0% of Valmont Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers 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%. Valmont Industries pays an annual dividend of $2.00 per share and has a dividend yield of 0.8%. Stanley Black & Decker pays out 33.3% of its earnings in the form of a dividend. Valmont Industries pays out 28.3% 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 Valmont Industries 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.
Summary
Stanley Black & Decker beats Valmont Industries on 13 of the 17 factors compared between the two stocks.
