Financial Analysis: Stanley Black & Decker (NYSE:SWK) vs. Mohawk Industries (NYSE:MHK)

Mohawk Industries (NYSE:MHK) and Stanley Black & Decker (NYSE:SWK) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Institutional and Insider Ownership

79.0% of Mohawk Industries shares are owned by institutional investors. Comparatively, 87.8% of Stanley Black & Decker shares are owned by institutional investors. 17.9% of Mohawk Industries shares are owned by insiders. Comparatively, 0.7% of Stanley Black & Decker shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Mohawk Industries and Stanley Black & Decker’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mohawk Industries	4.15%	7.50%	4.60%
Stanley Black & Decker	4.07%	8.78%	3.73%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Mohawk Industries and Stanley Black & Decker, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mohawk Industries	0	12	3	1	2.31
Stanley Black & Decker	1	6	3	0	2.20

Mohawk Industries currently has a consensus target price of $130.50, indicating a potential downside of 4.74%. Stanley Black & Decker has a consensus target price of $92.25, indicating a potential downside of 8.14%. Given Mohawk Industries’ stronger consensus rating and higher probable upside, research analysts clearly believe Mohawk Industries is more favorable than Stanley Black & Decker.

Earnings and Valuation

This table compares Mohawk Industries and Stanley Black & Decker”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mohawk Industries	$11.18 billion	0.83	$369.90 million	$7.55	18.14
Stanley Black & Decker	$15.25 billion	0.99	$401.90 million	$4.10	24.50

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

Volatility and Risk

Mohawk Industries has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Stanley Black & Decker has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

Summary

Mohawk Industries beats Stanley Black & Decker on 8 of the 14 factors compared between the two stocks.

About Mohawk Industries

Mohawk Industries, Inc. designs, manufactures, sources, distributes, and markets flooring products for residential and commercial remodeling, and new construction channels in the United States, Europe, Latin America, and internationally. It operates through three segments: Global Ceramic, Flooring North America, and Flooring Rest of the World. The company provides ceramic, porcelain, and natural stone tiles products for floor and wall applications; natural stones, porcelain slabs, and quartz countertops, as well as installation materials; floor covering products comprising broadloom carpets, carpet tiles, rugs and mats, carpet pads, laminates, medium-density fiberboards, wood floorings, luxury vinyl tiles, and sheet vinyl; and roofing panels, insulation boards, mezzanine flooring products, medium-density fiberboard, and chipboards. It also licenses its intellectual property to flooring manufacturers. The company sells its products under the American Olean, Daltile, Decortiles, Eliane, EmilGroup, KAI, Kerama Marazzi, Marazzi, Ragno, Aladdin Commercial, Durkan, Foss, IVC, Karastan, Mohawk, Mohawk Group, Mohawk Home, Pergo, Portico, Quick-Step, Feltex, GH Commercial, Godfrey Hirst, Hycraft, IVC Commercial, IVC Home, Lentex, Leoline, and Moduleo, Redbook, Unilin, and Vitromex brands. It offers its products to company-owned service centers and stores, company-operated distributors, floor covering retailers, wholesalers, mass merchandisers, department stores, shop at home, buying groups, ceramic tile specialists, e-commerce retailers, residential builders, independent distributors, commercial contractors, and commercial end users. The company was incorporated in 1988 and is headquartered in Calhoun, Georgia.

About Stanley Black & Decker

Stanley Black & Decker, Inc. engages in the provision of power and hand tools, and related accessories, products, services and equipment for oil and gas, infrastructure applications, commercial electronic security and monitoring systems, healthcare solutions, and mechanical access solutions. It operates through the Tools and Outdoor and Industrial segments. The Tools and Outdoor segment refers to power tools, hand tools, accessories and storage, and outdoor power equipment product lines. The Industrial segment includes the engineered fastening and infrastructure businesses. The company was founded by Frederick T. Stanley in 1843 and is headquartered in New Britain, CT.