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SWK (Stanley Black & Decker) WACC % :7.33% (As of Oct. 31, 2024)


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What is Stanley Black & Decker WACC %?

As of today (2024-10-31), Stanley Black & Decker's weighted average cost of capital is 7.33%%. Stanley Black & Decker's ROIC % is -31.32% (calculated using TTM income statement data). Stanley Black & Decker earns returns that do not match up to its cost of capital. It will destroy value as it grows.

For a comprehensive WACC calculation, please access the WACC Calculator.


Stanley Black & Decker WACC % Historical Data

The historical data trend for Stanley Black & Decker's WACC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Stanley Black & Decker WACC % Chart

Stanley Black & Decker Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
WACC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 10.04 8.77 9.14 7.79 9.27

Stanley Black & Decker Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
WACC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.91 9.27 8.50 9.56 7.40

Competitive Comparison of Stanley Black & Decker's WACC %

For the Tools & Accessories subindustry, Stanley Black & Decker's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Stanley Black & Decker's WACC % Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Stanley Black & Decker's WACC % distribution charts can be found below:

* The bar in red indicates where Stanley Black & Decker's WACC % falls into.



Stanley Black & Decker WACC % Calculation

The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.

WACC=E/(E + D)*Cost of Equity+D/(E + D)*Cost of Debt*(1 - Tax Rate)

1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Stanley Black & Decker's market capitalization (E) is $14327.991 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Sep. 2024, Stanley Black & Decker's latest one-year quarterly average Book Value of Debt (D) is $7166.84 Mil.
a) weight of equity = E / (E + D) = 14327.991 / (14327.991 + 7166.84) = 0.6666
b) weight of debt = D / (E + D) = 7166.84 / (14327.991 + 7166.84) = 0.3334

2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.282%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Stanley Black & Decker's beta is 1.12.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.282% + 1.12 * 6% = 11.002%

3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Sep. 2024, Stanley Black & Decker's interest expense (positive number) was $523.5 Mil. Its total Book Value of Debt (D) is $7166.84 Mil.
Cost of Debt = 523.5 / 7166.84 = 7.3045%.

4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 221.6 / 36.9 = 600.54%, which is higher than 100%. Therefore it's set to 100%.

Stanley Black & Decker's Weighted Average Cost Of Capital (WACC) for Today is calculated as:

WACC=E / (E + D)*Cost of Equity+D / (E + D)*Cost of Debt*(1 - Tax Rate)
=0.6666*11.002%+0.3334*7.3045%*(1 - 100%)
=7.33%

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Stanley Black & Decker  (NYSE:SWK) WACC % Explanation

Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Stanley Black & Decker's weighted average cost of capital is 7.33%%. Stanley Black & Decker's ROIC % is -31.32% (calculated using TTM income statement data). Stanley Black & Decker earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.

2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.

3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.

4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.


Related Terms

Stanley Black & Decker Business Description

Address
1000 Stanley Drive, New Britain, CT, USA, 06053
Stanley Black & Decker Inc is a manufacturer of hand and power tools. The company operates in two reportable segments namely Tools and Outdoor and Industrial. It generates maximum revenue from the Tools and Outdoor segment. The Tools and Outdoor segment is comprised of the Power Tools Group (PTG), Hand Tools, Accessories and Storage (HTAS), and Outdoor Power Equipment (Outdoor) businesses. Geographically, the company generates revenue from the United States, Canada, Other Americas, Europe, and Asia. It derives a majority of its revenue from the United States.
Executives
Janet Link officer: SVP, General Counsel & Sec'y 6501 LEGACY DRIVE, PLANO TX 75024
Graham Robinson officer: SVP & President of Industrial 1000 STANLEY DRIVE, NEW BRITAIN CT 06053
Susan K Carter director C/O INGERSOLL-RAND COMPANY, 800-E BEATY STREET, DAVIDSON NC 28036
Christopher John Nelson officer: Chief Operating Officer 13995 PASTEUR BOULEVARD, PALM BEACH GARDENS FL 33418
Tamer Abuaita officer: SVP, Global Supply Chain C/O SOVOS BRANDS, INC., 168 CENTENNIAL PARKWAY, SUITE 200, LOUISVILLE CO 80027
Patrick D Hallinan officer: EVP, Chief Financial Officer FORTUNE BRANDS HOME & SECURITY, INC., 520 LAKE COOK ROAD, DEERFIELD IL 60015
John Lucas officer: SVP, Chief HR Officer 200 INNOVATION WAY, AKRON OH 44316
Walburger Corbin officer: Interim CFO 1000 STANLEY DRIVE, NEW BRITAIN CT 06053
Scot Greulach officer: Chief Accounting Officer 1000 STANLEY DRIVE, NEW BRITAIN CT 06053
Robert J Manning director 1201 THIRD AVE, STE 4900, SEATTLE WA 98101
Andrea J. Ayers director STANLEY BLACK & DECKER, IN., 1000 STANLEY DRIVE, NEW BRITAIN CT 06053
Jocelyn Belisle officer: VP, Chief Accounting Officer 1000 STANLEY DRIVE, NEW BRITAIN CT 06053
Stephen Subasic officer: SVP, Chief HR Officer 1000 STANLEY DRIVE, NEW BRITAIN CT 06053
Adrian V Mitchell director C/O MACY'S, INC., 151 WEST 34TH STREET, NEW YORK NY 10001
Jaime A Ramirez officer: Pres.Construct.&DIY, Latin Am. 1000 STANLEY DRIVE, NEW BRITAIN CT 06053

Stanley Black & Decker Headlines

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