Leading household tools manufacturer Stanley Black & Decker (SWK) has generated record growth across all segments as the desire for comfortable living spaces continues to drive increased spending on home improvement projects. In fact, with young homeowners turning to renovation rather than buying new homes, the company is expected to continue seeing a surge in demand for its home improvement goods and services. So, we think SWK’s reasonable valuation, despite the company’s solid organic growth prospects, makes it a solid bet now. Let’s discuss.Founded in 1843, Stanley Black & Decker, Inc., New Britain, Conn.-based (SWK) is involved in tools and storage, industrial, and electronic security systems worldwide. A vibrant home improvement market with an increased focus by consumers on renovating living spaces and gardens amid the homebound lifestyle forced by the pandemic lockdown mandates enabled SWK to generate 31% organic growth in its last reported quarter.
Strong construction-related demand across all major markets and increased demand for both outdoor and indoor product electrification projects have helped SWK’s stock gain 51.1% over the past year and 14.7% year-to-date. The company has raised its 2021 adjusted EPS outlook to $10.70 - $11.00 from a range of $9.70-$10.30. Also, it expects its organic revenue growth to be in the range of 11-13%.
Amid a strong demand for home remodeling and increased discretionary spending on home improvement projects, we think SWK is well positioned to benefit and achieve record growth this year and beyond.