Stanley Black & Decker’s fourth-quarter dividend
Stanley Black & Decker (SWK) announced critical dates for the distribution of its fourth-quarter dividend. Investors who hold Stanley Black & Decker shares on record as of the close of business on November 30 will be eligible for the dividend. The company expects to pay the dividend on December 18.
For the fourth quarter, Stanley Black & Decker declared a dividend of $0.66 per share. The dividend rate didn’t change compared to the previous quarter. On a year-to-date basis, the dividend rate implies a dividend growth rate of 8.6% compared to the fourth quarter of 2017. 3M (MMM), Illinois Tool Works (ITW), and Caterpillar (CAT) have declared or paid fourth-quarter dividends of $1.36, $1.0, and $0.86 per share, respectively. Stanley Black & Decker’s third-quarter filing reported that the company had ~150.60 million outstanding common shares. If there aren’t any buybacks before the record date, Stanley Black & Decker will spend $99.4 million on dividend payments.
Since 2012, Stanley Black & Decker’s dividend has grown at a compound annual growth rate of 7.46%, which is seen as decent growth among its peers. However, investors will have to see if Stanley Black & Decker’s free cash flow can support the dividend growth.
Free cash flow
In the first nine months of 2018, Stanley Black & Decker’s free cash flow was negative due to higher capital expenditure. However, if we consider the data for the past six years, Stanley Black & Decker has used ~41% of its free cash flows to pay dividends, which indicates that it can support the current dividend payment and growth.
Investors could hold Stanley Black & Decker indirectly through the Invesco Zacks Mid-Cap ETF (CZA), which had 2.0% exposure to Stanley Black & Decker as of November 26.