HON vs SWK: Dividend Comparison
Dividend data as of
Honeywell International Inc (HON) and Stanley Black & Decker, Inc. (SWK) are both in the Industrials sector, making them natural rivals for dividend investors. SWK offers a significantly higher 3.60% yield compared to HON's 1.88%, a gap of 1.71%. For dividend growth, HON leads with a 5-year CAGR of 5.4% versus SWK's 2.6%. SWK holds the edge in dividend safety with a "Safe" rating. HON is a Dividend Contender while SWK is a Dividend Aristocrat.
Verdict
Yield Analysis
SWK yields 1.71% more than HON. In dollar terms, HON pays $4.58/share vs SWK's $3.30/share annually.
Dividend Growth
HON: Dividend growth has been steady, with a 3-year CAGR of 5.6% and a 5-year CAGR of 5.4% (10-year: 7.9%).
SWK: Dividend growth is slowing — the 3-year CAGR of 1.2% trails the 5-year rate of 2.6% and the 10-year rate of 4.3%.
Dividend Safety
HON: The payout ratio of 61% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.7x.
SWK: The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in HON vs SWK today?
At $241.59 per share, $10,000 buys about 41.4 shares of Honeywell International Inc (HON). Each share pays $4.58 per year in dividends, so the position starts out generating roughly $190 per year — about $16 a month.
At $91.08 per share, $10,000 buys about 109.8 shares of Stanley Black & Decker, Inc. (SWK). Each share pays $3.30 per year in dividends, so the position starts out generating roughly $362 per year — about $30 a month.
SWK is the larger income stream from day one: $173 per year more on the same $10,000 invested.
What could $10,000 of HON or SWK income look like in 10 years?
Honeywell International Inc (HON) has raised its dividend about 5.4% a year over the past five years. If that pace held, the $188 per year that $10,000 generates today at the current 1.88% yield would reach $318 per year by 2036 — a 3.2% yield on the original cost.
Stanley Black & Decker, Inc. (SWK) has raised its dividend about 2.6% a year over the past five years. If that pace held, the $360 per year that $10,000 generates today at the current 3.60% yield would reach $464 per year by 2036 — a 4.6% yield on the original cost.
On those trailing rates, SWK pays more in 2036: $464 versus $318 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would HON's dividend growth overtake SWK's higher yield?
Honeywell International Inc (HON) yields less today (1.88% vs 3.60%) but has grown its dividend faster — 5.4% vs 2.6% a year over the past five years. If both trends continued, a $10,000 position in HON would start out-earning the same position in SWK around 2050 (roughly 24 years from now), paying about $665 per year at the crossover. Before that point, SWK pays more each year; after it, the gap compounds in HON's favor.
Can HON and SWK afford their dividends?
Honeywell International Inc (HON) earns $7.58 per share against $4.58 paid out in dividends — 1.7x coverage (a 61% payout ratio).
Stanley Black & Decker, Inc. (SWK) earns $2.65 per share against $3.30 paid out in dividends — 0.8x coverage (a 1% payout ratio).
HON's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for SWK if earnings weaken.
Which fits an early-retirement income portfolio better, HON or SWK?
For income you need right now, Stanley Black & Decker, Inc. (SWK) leads: $100,000 invested today pays about $300 a month at the current 3.60% yield, versus $157 a month from Honeywell International Inc (HON) at 1.88%.
With a decade or more before the income is needed, HON's faster dividend growth (5.4% vs 2.6% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: HON has raised its dividend 15 consecutive years; SWK has raised its dividend 28 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $384/yr in HON vs $661/yr in SWK by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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