Stanley Black & Decker Looks Cheap as It Works on a Turnaround

Stanley Black & Decker's (NYSE: SWK) shares have declined more than 60% from their 2021 high-water mark. As you might expect, there's some bad news behind that drop. The good news is that this huge price drop has opened up an investment opportunity for turnaround-focused investors that like to buy dividend stocks when they look historically cheap. If that sounds like you, now could be a good time to examine this deeply out of favor industrial stock.

There is no question that Stanley Black & Decker is facing significant headwinds. The list includes a balance sheet with more leverage than normal, inflation, excess inventory built up during the pandemic, and the need to integrate acquisitions. The best way to see the impact is to look at earnings. As the chart below shows, trailing-12-month earnings peaked in 2021 and have been heading generally lower since.