Stanley Black & Decker’s second quarter dividend
Stanley Black & Decker (SWK) announced key dates for the distribution of its Q2 dividend. Investors on record as of the close of business on June 6 will be eligible for the dividend. The company expects to pay the dividend on June 19.
SWK has declared a dividend of $0.63 per share, an increase of 8.6% over the previous year. Industrial peers 3M (MMM), Deere (DE), and Caterpillar (CAT) have declared or paid second-quarter dividends of $1.36, $0.60, and $0.78 per share, respectively. SWK’s 10-Q filing reported that that the company had 154.3 million outstanding shares. If there aren’t any buybacks before the record date, SWK will spend $97.2 million on dividend payments. In Q2 2017, SWK paid a dividend of $86.7 million.
Free cash flow
In the first quarter of 2018, SWK’s free cash flows were negative, but investors should not be worried, as this is primarily due to capital expenditures. SWK has been generating strong free cash flows. In the past three years, SWK’s free cash flow has been more than $850 million every year. Out of this, SWK has used around 30% to 37% of the free cash flows to pay dividends, leaving more than 60% of its free cash flows for debt service and payment, expansion, share buybacks, and other corporate requirements.
Investors can indirectly hold SWK through the PowerShares DWA Consumer Staples Momentum Portfolio ETF (PSL), which had 3.1% exposure to SWK as of May 30, 2018.