Kennametal (NYSE:KMT) & Stanley Black & Decker (NYSE:SWK) Head to Head Contrast

Kennametal (NYSE:KMT) and Stanley Black & Decker (NYSE:SWK) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, profitability, valuation and risk.

Volatility & Risk

Kennametal has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, Stanley Black & Decker has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Institutional & Insider Ownership

87.8% of Stanley Black & Decker shares are held by institutional investors. 1.4% of Kennametal shares are held by insiders. Comparatively, 0.7% of Stanley Black & Decker shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for Kennametal and Stanley Black & Decker, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kennametal	3	6	0	0	1.67
Stanley Black & Decker	1	6	5	0	2.33

Kennametal currently has a consensus target price of $24.00, suggesting a potential upside of 9.29%. Stanley Black & Decker has a consensus target price of $89.90, suggesting a potential upside of 20.74%. Given Stanley Black & Decker’s stronger consensus rating and higher possible upside, analysts plainly believe Stanley Black & Decker is more favorable than Kennametal.

Dividends

Kennametal pays an annual dividend of $0.80 per share and has a dividend yield of 3.6%. Stanley Black & Decker pays an annual dividend of $3.32 per share and has a dividend yield of 4.5%. Kennametal pays out 66.7% of its earnings in the form of a dividend. Stanley Black & Decker pays out 105.4% 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 raised 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kennametal	4.73%	8.09%	4.19%
Stanley Black & Decker	3.15%	7.76%	3.08%

Earnings & Valuation

This table compares Kennametal and Stanley Black & Decker”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kennametal	$1.97 billion	0.85	$93.12 million	$1.20	18.30
Stanley Black & Decker	$15.37 billion	0.75	$286.30 million	$3.15	23.64

Stanley Black & Decker has higher revenue and earnings than Kennametal. Kennametal 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 Kennametal on 10 of the 17 factors compared between the two stocks.

About Kennametal

Kennametal Inc. engages in development and application of tungsten carbides, ceramics, and super-hard materials and solutions for use in metal cutting and extreme wear applications to enable customers work against corrosion and high temperatures conditions worldwide. The company operates through two segments, Metal Cutting and Infrastructure. It offers standard and custom products, including turning, milling, hole making, tooling systems, and services, as well as specialized wear components and metallurgical powders for manufacturers engaged in various industries, such as the manufacturers of transportation vehicles and components, machine tools, and light and heavy machinery; airframe and aerospace components; and energy-related components for the oil and gas industry, as well as power generation. In addition, the company provides specified product design, selection, application, and support services; and standard and custom metal cutting solutions to aerospace, general engineering, energy, and transportation customers. Further, it produces compacts, nozzles, frac seats, and custom components used in oil and gas, and petrochemical industries; rod blanks and abrasive water jet nozzles for general industries; earth cutting tools and systems used in underground mining, trenching and foundation drilling, and road milling; tungsten carbide powders for the oil and gas, aerospace, and process industries; and ceramics used by the packaging industry for metallization of films and papers. The company provides its products under the Kennametal, WIDIA, WIDIA Hanita, and WIDIA GTD brands through its direct sales force; a network of independent and national distributors; integrated supplier channels; and through the Internet. The company was founded in 1938 and is based in Pittsburgh, Pennsylvania.

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.