Stanley Black and Decker to pay second-quarter dividend
In a press release on April 17, Stanley Black and Decker (SWK) announced the key dates and rate for its second-quarter dividend. To be eligible for this dividend, investors should hold SWK’s stock as of the close of June 4, 2019. The dividend is expected to be paid to shareholders on June 18.
For the second quarter, Stanley Black & Decker declared a dividend of $0.66 per share. There was no change in the dividend rate compared to the previous quarter. On a year-to-date basis, the dividend rate implies a dividend growth rate of ~4.8% compared to the second quarter of 2018. 3M (MMM), Illinois Tool Works (ITW), and Caterpillar (CAT) have declared or paid second-quarter dividends of $1.44, $1.0, and $0.86 per share, respectively. Stanley Black & Decker’s first-quarter filing of 2019 indicates that it has ~149.91 million outstanding common shares. If there aren’t any buybacks before the record date, Stanley Black & Decker will spend $98.9 million on dividend payments.
Since 2012, SWK’s dividend has grown at a compound annual growth rate of 6.6%. However, it remains to be seen if SWK’s free cash flow can support its dividend growth.
Free cash flows
In the first quarter of 2019, SWK’s free cash flow has been negative. However, SWK’s annual free cash flow has remained positive. In the past seven years, SWK has used an average of 42% of its free cash to pay dividends, which indicates that SWK’s free cash flows can support its dividend growth.
Investors can hold Stanley Black & Decker indirectly through the Invesco DWA Consumer Staples Momentum ETF (PSL), which had 2.9% exposure to Stanley Black & Decker as of May 31, 2019.