Stanley Black & Decker, Inc. (NYSE:SWK) isn’t usually the first name that comes to mind when investors talk about dividend stocks. Still, its record is difficult to overlook. The company has raised its dividend for 58 consecutive years, putting it one increase away from Dividend King status. Its latest hike took the quarterly payout to $0.84 per share, or $3.36 annually.
For investors, the bigger question is whether that record can continue while the company works through the problems that have held back its business in recent years.
The Bull Case
The dividend’s biggest selling point is simple: consistency. Stanley Black & Decker, Inc. (NYSE:SWK) has raised its payout every year since 1968. That streak has survived recessions, weak housing markets, and plenty of other difficult periods. For income investors, that kind of history carries some weight.
There are also some early signs that the business is getting back on firmer ground. In the second quarter of 2026, sales reached $4 billion, while organic revenue increased 3% from a year earlier. Gross margin rose to 33% from 27%, and the company generated $763 million in operating cash flow. Free cash flow was $698 million. The balance sheet is looking healthier too. Stanley Black & Decker paid down $1.7 billion of debt during the quarter, helped by money from the sale of its Consolidated Aerospace Manufacturing business. The company also spent $250 million on stock buybacks.
Management has also raised its outlook for 2026. It now expects adjusted EPS of $5.20 to $5.80 and free cash flow of $600 million to $800 million. At the midpoint of the EPS range, the $3.36 annual dividend would amount to a payout ratio of roughly 61%. That is a reasonable level and gives the dividend some breathing room from an earnings perspective.
Free cash flow is encouraging as well. Stanley Black & Decker, Inc. (NYSE:SWK) generated $688 million in FCF in 2025 and paid about $500 million in dividends. The dividend was covered, though the cushion wasn’t especially large. If cash generation keeps improving and debt continues to fall, management should have more flexibility to increase the payout over time.
The Bear Case
The weak spot in the story is dividend growth. The latest increase was just 1.2%, moving the quarterly payment from $0.83 to $0.84. The increase keeps the streak intact, but it won’t move the needle much for shareholders. Investors who want high-single-digit or double-digit annual dividend growth are unlikely to find it here right now.
Then there is the cyclical nature of the business. Sales of tools and outdoor products can be affected by construction activity, housing trends, and consumer spending. That pressure was visible in 2025, when sales dropped 2%, and organic revenue declined 1%.
The recent improvement also needs to be put in context. Tariff refunds gave second-quarter margins and earnings a meaningful boost. That makes it harder to say that all of the improvement came from the underlying business, and investors should be careful about assuming the same benefit will repeat.
Free cash flow coverage is another thing worth watching. The company has roughly $520 million in annual dividend obligations, compared with its 2026 FCF guidance of $600 million to $800 million. If FCF lands near the lower end, there wouldn’t be much left after the dividend is paid. The dividend doesn’t look immediately threatened, but bigger increases will probably have to wait until the business is generating more cash on a consistent basis.
Conclusion
Stanley Black & Decker, Inc. (NYSE:SWK) has something that is difficult to replicate: 58 consecutive years of dividend increases. The improvement in cash flow, margins, and debt also suggests that the company’s turnaround is making some progress.
For now, Stanley Black & Decker looks more like a steady income play with turnaround potential than a high-growth dividend stock. The payout appears manageable, but the next step is proving that stronger cash flow can be sustained. If management keeps improving the business and bringing down debt, the stock could become a more interesting dividend opportunity as it heads toward its 60th consecutive increase.
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Disclosure: None. This article is originally published at Insider Monkey.
