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Here's Why Hold Strategy is Apt for Stanley Black Stock Right Now
ZACKSยท 2025-04-15 17:20
Group 1: Company Performance - Stanley Black & Decker, Inc. (SWK) is experiencing strong performance in the Tools & Outdoor segment, with organic revenues increasing by 3% to $3.2 billion in Q4 2024, driven by the DEWALT business and a solid holiday season [1] - The Industrial segment, however, faced challenges, with revenues declining by 15.4% year over year to $492.9 million due to softness in the automotive end market and constrained capital expenditure [6] Group 2: Cost Reduction and Profitability - The company is implementing a multi-year global cost-reduction program aimed at achieving pre-tax run-rate cost savings of $2 billion by the end of 2025, with a long-term adjusted gross margin target of over 35% [2] - Of the $2 billion savings, $1.5 billion is expected to come from four core supply-chain transformation initiatives [2] Group 3: Shareholder Returns - In 2024, the company paid out $491.2 million in dividends, reflecting a year-over-year increase of 1.8%, and repurchased shares worth $17.7 million [3] - The quarterly dividend was increased by a penny to 82 cents per share in July 2024 [3] Group 4: Financial Health - The company has a highly leveraged balance sheet, with long-term debt at $5.6 billion and current maturities of long-term debt totaling $500.4 million as of the end of 2024 [7] - Cash and cash equivalents amount to $290.5 million, which is considered low given the high debt level [7]