HON vs SWK: Dividend Yield, Growth & Safety Comparison
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.
Key Metrics Comparison
| Metric | HON | SWK |
|---|
| Dividend Yield | 1.88% | 3.60% |
| Annual Dividend | $4.58 | $3.30 |
| 5-Year CAGR | 5.4% | 2.6% |
| Payout Ratio | 61% | 1% |
| Consecutive Years | 15 | 28 |
| Price | $241.59 | $91.08 |
Yield Comparison
Stanley Black & Decker, Inc. (SWK) currently yields 3.60%, which is solid for the broader market. That's 1.71% more than Honeywell International Inc (HON), which yields 1.88%. In dollar terms, SWK pays $3.30/share annually versus HON's $4.58/share.
Dividend Growth
Over the past five years, HON has grown its dividend at a 5.4% CAGR compared to SWK's 2.6%. 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's dividend safety is rated "Moderate." 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's dividend safety is rated "Safe." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x. SWK's payout ratio of 1% is more conservative than HON's 61%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in SWK generates approximately $360/year in dividend income, compared to $188/year from HON — a difference of $172/year. At $100,000, that gap widens to $1720/year.
Verdict
- Best for income: SWK
- Best for growth: HON
- Best for safety: SWK
Frequently Asked Questions
Which has a higher dividend yield, HON or SWK?
Stanley Black & Decker, Inc. (SWK) has a higher dividend yield of 3.60% compared to Honeywell International Inc (HON) at 1.88%.
Is HON or SWK a better dividend growth stock?
Honeywell International Inc has the stronger dividend growth with a 5-year CAGR of 5.4%, compared to Stanley Black & Decker, Inc.'s 2.6%.
Which is safer for dividend income, HON or SWK?
Honeywell International Inc's dividend safety is rated "Moderate" while Stanley Black & Decker, Inc. is rated "Safe." 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. The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x.
How much income does $10,000 in HON vs SWK generate?
A $10,000 investment in HON generates approximately $188/year in dividends, while the same amount in SWK generates about $360/year.
Is HON or SWK a Dividend Aristocrat?
Honeywell International Inc is a Dividend Contender (15 years) and Stanley Black & Decker, Inc. is a Dividend Aristocrat (28 years).
Which has a lower payout ratio, HON or SWK?
Stanley Black & Decker, Inc. has a lower payout ratio of 1% compared to Honeywell International Inc's 61%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
HON vs SWK: which is better for retirement income?
It depends on your priorities. SWK for current income, HON for dividend growth, SWK for safety. Many retirement investors hold both for diversification.
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