Dividend Aristocrat Overview: Stanley, Black and Decker, Inc.

About Stanley, Black and Decker, Inc.

Stanley, Black and Decker has increased dividends since 1968. Photo courtesy Charlie Brewer/flickr.com.

Stanley Works first began increasing dividends in 1968. Stanley Works and Black and Decker merged in 2010 to form Stanley, Black and Decker.
Photo courtesy Charlie Brewer/flickr.com.

Stanley, Black and Decker was formed in 2010 by the merger of Stanley Works and Black and Decker.  The company produces industrial and household tools, security systems and other engineering solutions for customers around the world.  In 2013, Stanley, Black and Decker earned $1.5 billion (EBITDA) on $11.0 billion in revenues.

The company’s history began in 1843 when Frederick Stanley started a shop in Connecticut to manufacture wrought iron hardware.  67 years later, in 1910, S. Duncan Black and Alonzo Decker started a similar shop in Baltimore, MD.  Over the decades, both companies grew in size and scope until their merger in 2010.  Stanley, Black and Decker boasts 21 different brands including Bostitch® Tools, AeroScout® Real-Time Location Systems, Powers Fasteners®, Vidmar® Storage Solutions and the eponymous Black+Decker® and Stanley® lines of tools.

The company is a member of the S&P 500 index, a Fortune 500 company, and trades under the ticker symbol SWK.

Stanley, Black and Decker’s Dividend and Stock Split History

Stanley, Black and Decker began increasing their annual dividends in 1968.  They met the Dividend Aristocrat criteria of 25 consecutive years of increases in 1993.  The company has paid quarterly dividends for nearly 120 years and has paid dividends annually for 137 years.  The company has announced dividend increases in July and paid the new dividend amount in September since 1983, except for 1997 and 2011 when the company did not increase the dividend.  (Stanley, Black and Decker increased the dividend in the 4th quarter of 1997 and had two dividend increases in 2010.)  In 2013, Stanley, Black and Decker increased the quarterly dividend by a penny – or 2.04% – to 50 cents per share from 49 cents per share.  The company is expected to announce its next dividend increase in July 2014 and paid it out in September 2014.

Stanley, Black and Decker has an above average 5-year compounded average dividend growth rate (CADGR) of 9.46%.  The company’s 10-year and 20-year CADGRs of 6.75% and 5.57% are merely average and reflect a 12-year period (1999 – 2010) of annual dividend increases below 5%.  Stanley, Black and Decker’s 25-year CADGR is 6.01%, in line with other Dividend Aristocrats.

Since 1968, when Stanley, Black and Decker began increasing dividends, the company has split its stock 5 times.  The company split its stock 2 for 1 in June 1971, April 1980 and April 1996, and split 3 for 2 in August 1978 and August 1986.  In addition, Stanley paid a 3% stock dividend in September 1972.

100 shares purchased in July 1993 when the company met the Dividend Aristocrat criteria of 25 years of consecutive dividend increases would have cost $4,038.  Those shares have grown at an annual compounded rate of approximately 7% since then.  This excludes any effect of reinvesting dividends, which would have increased the return.

Stanley, Black and Decker’s Direct Purchase and Dividend Reinvestment Plans

Stanley, Black and Decker offers both a direct purchase and a dividend reinvestment plan.  Both plans are maintained by ComputerShare; information is available at its website.  The minimum initial investment is $250; a minimum of $100 is required for additional investments.

The plans have both purchase and sales fees.  The fee to set up a direct purchase or dividend reinvestment account is $10.  A fee of $5 plus 10 cents per share is assessed on each direct purchase by check or one-time direct debit.  Ongoing monthly direct debit purchases are charged a fee of $2 plus 10 cents per share.  Investors have the option of reinvesting dividends in full or only in part.  Stanley, Black and Decker pays all transaction and per share fees on dividend reinvestments.

When selling shares, investors will pay a transaction fee of $15 plus a commission of 12 cents per share.  Investors can minimize fees by buying and selling shares in larger quantities or by signing up for the monthly direct debit plan.  Other fees may apply and investors should carefully review the plan documents.

Helpful Links

Stanley, Black and Decker’s Investor Relations Website

Current quote and financial summary for Stanley, Black and Decker (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Stanley, Black and Decker

Want to find out about more great dividend growth stocks?  Check out the list of current S&P Dividend Aristocrats.