Stanley Black & Decker to pay 3Q17 dividend
Stanley Black & Decker (SWK) will pay a dividend of $0.63 per share. The dividend is expected to be paid on September 19, 2017. Investors holding the stock on or before the record date of September 1, 2017, are eligible to get the dividend. This is SWK’s 50th consecutive annual dividend increase.
SWK’s dividend declaration of $0.63 per share implies a dividend increase of 8.6% over the previous quarterly dividend of $0.58 per share. Since 2012, SWK’s dividend has grown at a CAGR (compound annual growth rate) of 6.1%.
Free cash flows
Free cash flows are essential for a company to finance its dividend payments, debt repayments, and expansion plans. To check whether SWK is generating the required cash flow to sustain the dividend growth, we will convert SWK’s free cash flow into free cash flow per share.
Since 2012, SWK’s free cash flow per share has grown at a CAGR of 21.2%, while its dividends have grown at a CAGR of 6.1% over the same period, which indicates that SWK’s free cash flow can easily manage the dividend growth. However, in 2Q17, SWK generated free cash flow of $134.3 million, a decline of 67.8% over 2Q16. For the first six months of 2017, SWK’s free cash flow stood at -$76 million.
Investors can indirectly hold SWK by investing in the PowerShares DWA Consumer Staples Momentum Portfolio (PSL), which has invested 3.3% of its portfolio in SWK. The other holdings of the fund include Constellation Brands (STZ), National Beverage (FIZZ), and Rollins (ROL), which have weights 4.5%, 4.4%, and 3.9%, respectively, as of August 21, 2017.