Stanley Black & Decker (NYSE: SWK) and Dover Corporation (NYSE:DOV) are both large-cap industrial machinery & equipment – nec companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, risk, dividends, earnings, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

82.0% of Stanley Black & Decker shares are owned by institutional investors. Comparatively, 85.0% of Dover Corporation shares are owned by institutional investors. 1.2% of Stanley Black & Decker shares are owned by insiders. Comparatively, 2.5% of Dover Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Stanley Black & Decker and Dover Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stanley Black & Decker 0 2 15 0 2.88
Dover Corporation 0 10 7 0 2.41

Stanley Black & Decker presently has a consensus target price of $167.73, indicating a potential upside of 2.73%. Dover Corporation has a consensus target price of $94.09, indicating a potential downside of 0.14%. Given Stanley Black & Decker’s stronger consensus rating and higher possible upside, equities analysts clearly believe Stanley Black & Decker is more favorable than Dover Corporation.

Earnings and Valuation

This table compares Stanley Black & Decker and Dover Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Stanley Black & Decker $11.41 billion 2.19 $965.30 million $7.92 20.61
Dover Corporation $6.79 billion 2.16 $508.89 million $4.30 21.91

Stanley Black & Decker has higher revenue and earnings than Dover Corporation. Stanley Black & Decker is trading at a lower price-to-earnings ratio than Dover Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Stanley Black & Decker pays an annual dividend of $2.52 per share and has a dividend yield of 1.5%. Dover Corporation pays an annual dividend of $1.88 per share and has a dividend yield of 2.0%. Stanley Black & Decker pays out 31.8% of its earnings in the form of a dividend. Dover Corporation pays out 43.7% 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 61 consecutive years and Dover Corporation has raised its dividend for 49 consecutive years.

Risk & Volatility

Stanley Black & Decker has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Dover Corporation has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Stanley Black & Decker 9.79% 15.41% 5.76%
Dover Corporation 8.91% 14.10% 5.52%

Summary

Stanley Black & Decker beats Dover Corporation on 12 of the 17 factors compared between the two stocks.

About Stanley Black & Decker

Stanley Black & Decker, Inc. is a global provider of hand tools, power tools and related accessories, mechanical access solutions, such as automatic doors and commercial locking systems, electronic security and monitoring systems, healthcare solutions, engineered fastening systems, and products and services for various industrial applications. The Company’s segments include Tools & Storage, Security and Industrial. Its Tools & Storage segment consists of the Power Tools and Hand Tools, Accessories and Storage businesses. Its Security segment consists of the Convergent Security Solutions and Mechanical Access Solutions businesses. Its Industrial segment consists of the Engineered Fastening and Infrastructure businesses. It offers brands, such as SIDCHROME, AeroScout, DEWALT, Newell Tools and Craftsman, Irwin, Lenox, Craftsman, BLACK+DECKER, SONITROL, Warren, GRIPCO, Porter-Cable, BOSTITCH and WanderGuard.

About Dover Corporation

Dover Corporation is a diversified global manufacturer delivering equipment and components, specialty systems, consumable supplies, software and digital solutions and support services. The Company’s segments include Energy, Engineered Systems, Fluids and Refrigeration & Food Equipment. The Company’s Energy segment is a provider of solutions and services for production and processing of fuels around the world. Its Engineered Systems segment includes two platforms: Printing & Identification, and Industrials and is focused on the design, manufacture and service of critical equipment and components serving the fast-moving consumer goods, digital textile printing and industrial end markets. Its Fluids segment is focused on the safe handling of critical fluids across the retail fueling, chemical, and industrial end markets. The Refrigeration & Food Equipment segment is a provider of energy efficient equipment and systems serving the commercial refrigeration and food equipment end markets.

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