Stanley Black & Decker’s dividend yield
A company’s dividend yield is the return investors get for every dollar invested in the company’s equity. Long-term investors generally prefer to invest in stocks with a higher dividend yield and good dividend growth.
As of March 13, SWK’s dividend yield was 1.6%, assuming that SWK would pay a dividend of $0.63 per share for all quarters. However, SWK has a history of increasing its dividend in the third quarter. SWK’s dividend yield has risen after four quarters. Industrial peers Honeywell (HON), Deere (DE), and Caterpillar (CAT) have a dividend yield of 1.9%, 1.5%, and 2.0%, respectively.
SWK yields some of the lowest dividends among peers. SWK’s current yield is lower than that of one-year Treasury bonds, possibly making it less attractive to long-term investors. To keep long-term investors interested, SWK could consider improving its dividend yield by increasing dividends.
Why did SWK’s dividend yield improve?
SWK’s dividend yield improved primarily due to its stock price falling. SWK’s stock price has fallen 10.8% since it reached a high of $175.91 on January 19, 2018. The decline was likely due to a global sell-off because of negative sentiment toward trade wars. If this fear is sidelined, SWK’s stock could continue to move upwards, lowering its dividend yield. For indirect exposure to SWK, investors could consider the iShares Edge MSCI Multifactor Industrials ETF (INDF), which had invested 2.8% of its portfolio in SWK as of March 13, 2018.