Contrasting Stanley Black & Decker (NYSE:SWK) and The Berkeley Group (OTCMKTS:BKGFF)

The Berkeley Group (OTCMKTS:BKGFF) and Stanley Black & Decker (NYSE:SWK) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Institutional and Insider Ownership

45.9% of The Berkeley Group shares are held by institutional investors. Comparatively, 87.8% of Stanley Black & Decker shares are held by institutional investors. 0.7% of Stanley Black & Decker shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for The Berkeley Group and Stanley Black & Decker, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Berkeley Group	0	0	0	0	0.00
Stanley Black & Decker	1	6	3	0	2.20

Stanley Black & Decker has a consensus price target of $92.25, indicating a potential downside of 7.63%. Given Stanley Black & Decker’s stronger consensus rating and higher possible upside, analysts plainly believe Stanley Black & Decker is more favorable than The Berkeley Group.

Profitability

This table compares The Berkeley Group and Stanley Black & Decker’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Berkeley Group	N/A	N/A	N/A
Stanley Black & Decker	4.07%	8.78%	3.73%

Dividends

The Berkeley Group pays an annual dividend of $1.80 per share and has a dividend yield of 3.6%. Stanley Black & Decker pays an annual dividend of $3.32 per share and has a dividend yield of 3.3%. The Berkeley Group pays out 68.8% of its earnings in the form of a dividend. Stanley Black & Decker pays out 81.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Stanley Black & Decker has raised its dividend for 58 consecutive years. The Berkeley Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares The Berkeley Group and Stanley Black & Decker”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Berkeley Group	N/A	N/A	N/A	$2.62	19.37
Stanley Black & Decker	$15.13 billion	1.00	$401.90 million	$4.10	24.36

Stanley Black & Decker has higher revenue and earnings than The Berkeley Group. The Berkeley Group 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.

Summary

Stanley Black & Decker beats The Berkeley Group on 12 of the 14 factors compared between the two stocks.

About The Berkeley Group

The Berkeley Group Holdings plc, together with its subsidiaries, engages in the residential-led and mixed-use property development and ancillary activities in the United Kingdom. The company is involved in land selling activities. It operates under the Berkeley, St Edward, St George, St James, St Joseph, and St William brand names. The Berkeley Group Holdings plc was founded in 1976 and is headquartered in Cobham, the United Kingdom.

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.