Head-To-Head Review: Stanley Black & Decker (SWK) and Comfort Systems USA (NYSE:FIX)

Comfort Systems USA (NYSE: FIX) and Stanley Black & Decker (NYSE:SWK) are both industrial machinery & equipment – nec companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.

Earnings & Valuation

This table compares Comfort Systems USA and Stanley Black & Decker’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Comfort Systems USA $1.63 billion 0.93 $64.89 million $1.71 24.06
Stanley Black & Decker $11.41 billion 2.19 $965.30 million $7.92 20.58

Stanley Black & Decker has higher revenue and earnings than Comfort Systems USA. Stanley Black & Decker is trading at a lower price-to-earnings ratio than Comfort Systems USA, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Comfort Systems USA has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, Stanley Black & Decker has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Dividends

Comfort Systems USA pays an annual dividend of $0.30 per share and has a dividend yield of 0.7%. Stanley Black & Decker pays an annual dividend of $2.52 per share and has a dividend yield of 1.5%. Comfort Systems USA pays out 17.5% 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. Comfort Systems USA has raised its dividend for 4 consecutive years and Stanley Black & Decker has raised its dividend for 49 consecutive years. Stanley Black & Decker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

92.9% of Comfort Systems USA shares are owned by institutional investors. Comparatively, 83.7% of Stanley Black & Decker shares are owned by institutional investors. 3.5% of Comfort Systems USA shares are owned by insiders. Comparatively, 1.2% of Stanley Black & Decker shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Comfort Systems USA and Stanley Black & Decker’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Comfort Systems USA 3.76% 16.49% 8.14%
Stanley Black & Decker 9.79% 15.41% 5.76%

Analyst Recommendations

This is a summary of recent ratings for Comfort Systems USA and Stanley Black & Decker, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Comfort Systems USA 0 4 1 0 2.20
Stanley Black & Decker 0 3 14 0 2.82

Comfort Systems USA presently has a consensus price target of $63.00, indicating a potential upside of 53.10%. Stanley Black & Decker has a consensus price target of $167.73, indicating a potential upside of 2.92%. Given Comfort Systems USA’s higher probable upside, research analysts clearly believe Comfort Systems USA is more favorable than Stanley Black & Decker.

Summary

Stanley Black & Decker beats Comfort Systems USA on 9 of the 17 factors compared between the two stocks.

About Comfort Systems USA

Comfort Systems USA, Inc. is a provider of mechanical contracting services, which principally includes heating, ventilation and air conditioning (HVAC), plumbing, piping and controls, as well as off-site construction, electrical, monitoring and fire protection. As of December 31, 2016, the Company installed, maintained, repaired and replaced products and systems throughout its 35 operating units in 84 cities and 91 locations throughout the United States. The Company operates primarily in the commercial, industrial and institutional HVAC markets and offers services in the industrial, healthcare, education, office, technology, retail and government facilities. The Company provides a range of construction, renovation, expansion, maintenance, repair and replacement services for mechanical and related systems in commercial, industrial and institutional properties. The Company also provides remote monitoring of temperature, pressure, humidity and air flow for HVAC systems.

About Stanley Black & Decker

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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