Comparing Parker-Hannifin Corporation (PH) & Stanley Black & Decker (SWK)

Parker-Hannifin Corporation (NYSE: PH) and Stanley Black & Decker (NYSE:SWK) are both large-cap industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Profitability

This table compares Parker-Hannifin Corporation and Stanley Black & Decker’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Parker-Hannifin Corporation 8.18% 22.90% 8.06%
Stanley Black & Decker 9.79% 15.41% 5.76%

Analyst Ratings

This is a breakdown of current ratings and price targets for Parker-Hannifin Corporation and Stanley Black & Decker, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Parker-Hannifin Corporation 0 7 14 0 2.67
Stanley Black & Decker 0 3 13 0 2.81

Parker-Hannifin Corporation presently has a consensus price target of $182.17, suggesting a potential downside of 0.24%. Stanley Black & Decker has a consensus price target of $167.73, suggesting a potential upside of 3.83%. Given Stanley Black & Decker’s stronger consensus rating and higher possible upside, analysts plainly believe Stanley Black & Decker is more favorable than Parker-Hannifin Corporation.

Dividends

Parker-Hannifin Corporation pays an annual dividend of $2.64 per share and has a dividend yield of 1.4%. Stanley Black & Decker pays an annual dividend of $2.52 per share and has a dividend yield of 1.6%. Parker-Hannifin Corporation pays out 36.5% of its earnings in the form of a dividend. Stanley Black & Decker pays out 31.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Parker-Hannifin Corporation has raised its dividend for 49 consecutive years. Stanley Black & Decker is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Parker-Hannifin Corporation has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, Stanley Black & Decker has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Earnings and Valuation

This table compares Parker-Hannifin Corporation and Stanley Black & Decker’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Parker-Hannifin Corporation $12.03 billion 2.02 $1.80 billion $7.23 25.26
Stanley Black & Decker $11.84 billion 2.09 $1.91 billion $7.92 20.40

Stanley Black & Decker has higher revenue, but lower earnings than Parker-Hannifin Corporation. Stanley Black & Decker is trading at a lower price-to-earnings ratio than Parker-Hannifin Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

79.5% of Parker-Hannifin Corporation shares are owned by institutional investors. Comparatively, 83.6% of Stanley Black & Decker shares are owned by institutional investors. 1.1% of Parker-Hannifin Corporation shares are owned by company insiders. Comparatively, 1.2% of Stanley Black & Decker shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Stanley Black & Decker beats Parker-Hannifin Corporation on 11 of the 17 factors compared between the two stocks.

Parker-Hannifin Corporation Company Profile

Parker-Hannifin Corporation is a manufacturer of motion and control technologies and systems, providing precision engineered solutions for a range of mobile, industrial and aerospace markets. The Company operates through segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial Segment is an aggregation of several business units, which manufacture motion-control and fluid power system components for builders and users of various types of manufacturing, packaging, processing, transportation, agricultural, construction, and military vehicles and equipment. The Diversified Industrial Segment consists of Automation Group, Engineered Materials Group, Filtration Group, Fluid Connectors Group, Hydraulics Group and Instrumentation Group. The Aerospace Systems Segment produces hydraulic, fuel, pneumatic and electro-mechanical systems and components, which are utilized on domestic commercial, military and general aviation aircrafts.

Stanley Black & Decker Company Profile

Stanley Black & Decker, Inc. is a global provider of hand tools, power tools and related accessories, mechanical access solutions, such as automatic doors and commercial locking systems, electronic security and monitoring systems, healthcare solutions, engineered fastening systems, and products and services for various industrial applications. The Company’s segments include Tools & Storage, Security and Industrial. Its Tools & Storage segment consists of the Power Tools and Hand Tools, Accessories and Storage businesses. Its Security segment consists of the Convergent Security Solutions and Mechanical Access Solutions businesses. Its Industrial segment consists of the Engineered Fastening and Infrastructure businesses. It offers brands, such as SIDCHROME, AeroScout, DEWALT, Newell Tools and Craftsman, Irwin, Lenox, Craftsman, BLACK+DECKER, SONITROL, Warren, GRIPCO, Porter-Cable, BOSTITCH and WanderGuard.

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