Stanley Black & Decker (NYSE:SWK) and Watts Water Technologies (NYSE:WTS) are both industrial products companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, profitability, risk, analyst recommendations, dividends and institutional ownership.
Valuation and Earnings
This table compares Stanley Black & Decker and Watts Water Technologies' revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Stanley Black & Decker | $14.44 billion | 2.29 | $955.80 million | $8.40 | 24.45 |
| Watts Water Technologies | $1.60 billion | 2.53 | $131.50 million | $4.07 | 29.62 |
Stanley Black & Decker has higher revenue and earnings than Watts Water Technologies. Stanley Black & Decker is trading at a lower price-to-earnings ratio than Watts Water Technologies, indicating that it is currently the more affordable of the two stocks.
Dividends
Stanley Black & Decker pays an annual dividend of $2.80 per share and has a dividend yield of 1.4%. Watts Water Technologies pays an annual dividend of $0.92 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. Watts Water Technologies pays out 22.6% 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 increased its dividend for 54 consecutive years and Watts Water Technologies has increased 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.
Analyst Recommendations
This is a summary of current recommendations for Stanley Black & Decker and Watts Water Technologies, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Stanley Black & Decker | 0 | 4 | 9 | 0 | 2.69 |
| Watts Water Technologies | 0 | 3 | 0 | 0 | 2.00 |
Stanley Black & Decker currently has a consensus price target of $191.1538, indicating a potential downside of 6.93%. Watts Water Technologies has a consensus price target of $124.00, indicating a potential upside of 2.87%. Given Watts Water Technologies' higher possible upside, analysts plainly believe Watts Water Technologies is more favorable than Stanley Black & Decker.
Risk and Volatility
Stanley Black & Decker has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, Watts Water Technologies has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.
Profitability
This table compares Stanley Black & Decker and Watts Water Technologies' 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% |
| Watts Water Technologies | 7.67% | 13.15% | 7.45% |
Insider & Institutional Ownership
85.4% of Stanley Black & Decker shares are held by institutional investors. Comparatively, 75.0% of Watts Water Technologies shares are held by institutional investors. 1.0% of Stanley Black & Decker shares are held by company insiders. Comparatively, 1.1% of Watts Water Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Stanley Black & Decker beats Watts Water Technologies on 10 of the 17 factors compared between the two stocks.
