Head-To-Head Analysis: Stanley Black & Decker (NYSE:SWK) & Sandvik (OTCMKTS:SDVKY)

Sandvik (OTCMKTS:SDVKY) and Stanley Black & Decker (NYSE:SWK) are both large-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Analyst Recommendations

This is a summary of current recommendations and price targets for Sandvik and Stanley Black & Decker, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sandvik	1	1	1	2	2.80
Stanley Black & Decker	1	4	5	0	2.40

Stanley Black & Decker has a consensus price target of $91.10, indicating a potential upside of 34.68%. Given Stanley Black & Decker’s higher probable upside, analysts clearly believe Stanley Black & Decker is more favorable than Sandvik.

Institutional and Insider Ownership

0.7% of Sandvik shares are held by institutional investors. Comparatively, 87.8% of Stanley Black & Decker shares are held by institutional investors. 0.7% of Stanley Black & Decker shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Sandvik and Stanley Black & Decker’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sandvik	11.95%	16.64%	8.47%
Stanley Black & Decker	2.40%	7.85%	3.09%

Volatility & Risk

Sandvik has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500. Comparatively, Stanley Black & Decker has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500.

Dividends

Sandvik pays an annual dividend of $0.35 per share and has a dividend yield of 1.5%. Stanley Black & Decker pays an annual dividend of $3.28 per share and has a dividend yield of 4.8%. Sandvik pays out 31.5% of its earnings in the form of a dividend. Stanley Black & Decker pays out 136.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Stanley Black & Decker has increased its dividend for 58 consecutive years. Stanley Black & Decker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Sandvik and Stanley Black & Decker”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sandvik	$11.62 billion	2.51	$1.16 billion	$1.11	20.93
Stanley Black & Decker	$15.37 billion	0.68	$286.30 million	$2.41	28.07

Sandvik has higher earnings, but lower revenue than Stanley Black & Decker. Sandvik 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.

About Sandvik

Sandvik AB (publ), an engineering company, provides products and solutions for mining and rock excavation, metal cutting, and materials technology worldwide. The company offers mining and rock excavation equipment, including drill rigs and bolters, underground loaders and trucks, mechanical cutting equipment, rock tools and rock drills, and mining automation; rock processing equipment, such as crushers, screens, hydraulic breakers, demolition tools, and breaker booms. It also provides metal-cutting tools and tooling systems, and digital solutions and software; metal powder for additive manufacturing, and components made from controlled expansion alloys; and tungsten powders, as well as recycling services of secondary tungsten raw materials. The company serves aerospace, automotive, energy, general engineering, infrastructure, and mining industries. Sandvik AB (publ) was founded in 1862 and is headquartered in Stockholm, Sweden.

About Stanley Black & Decker

Stanley Black & Decker, Inc. engages in the provision of power and hand tools, and related accessories, products, services and equipment for oil and gas, infrastructure applications, commercial electronic security and monitoring systems, healthcare solutions, and mechanical access solutions. It operates through the Tools and Outdoor and Industrial segments. The Tools and Outdoor segment refers to power tools, hand tools, accessories and storage, and outdoor power equipment product lines. The Industrial segment includes the engineered fastening and infrastructure businesses. The company was founded by Frederick T. Stanley in 1843 and is headquartered in New Britain, CT.