SWK vs UNP: Dividend Comparison
Dividend data as of
Stanley Black & Decker, Inc. (SWK) and Union Pacific Corp (UNP) are both in the Industrials sector, making them natural rivals for dividend investors. SWK offers a significantly higher 3.60% yield compared to UNP's 2.08%, a gap of 1.51%. For dividend growth, UNP leads with a 5-year CAGR of 6.1% versus SWK's 2.6%. Both stocks carry a "Safe" dividend safety rating. SWK is a Dividend Aristocrat while UNP is a Dividend Contender.
Verdict
Yield Analysis
SWK yields 1.51% more than UNP. In dollar terms, SWK pays $3.30/share vs UNP's $5.44/share annually.
Dividend Growth
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%.
UNP: Dividend growth is slowing — the 3-year CAGR of 2.3% trails the 5-year rate of 6.1% and the 10-year rate of 10.3%.
Dividend Safety
SWK: The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x.
UNP: The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in SWK vs UNP today?
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.
At $260.92 per share, $10,000 buys about 38.3 shares of Union Pacific Corp (UNP). Each share pays $5.44 per year in dividends, so the position starts out generating roughly $208 per year — about $17 a month.
SWK is the larger income stream from day one: $154 per year more on the same $10,000 invested.
What could $10,000 of SWK or UNP income look like in 10 years?
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.
Union Pacific Corp (UNP) has raised its dividend about 6.1% a year over the past five years. If that pace held, the $208 per year that $10,000 generates today at the current 2.08% yield would reach $377 per year by 2036 — a 3.8% yield on the original cost.
On those trailing rates, SWK pays more in 2036: $464 versus $377 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would UNP's dividend growth overtake SWK's higher yield?
Union Pacific Corp (UNP) yields less today (2.08% vs 3.60%) but has grown its dividend faster — 6.1% vs 2.6% a year over the past five years. If both trends continued, a $10,000 position in UNP would start out-earning the same position in SWK around 2043 (roughly 17 years from now), paying about $571 per year at the crossover. Before that point, SWK pays more each year; after it, the gap compounds in UNP's favor.
Can SWK and UNP afford their dividends?
Stanley Black & Decker, Inc. (SWK) earns $2.65 per share against $3.30 paid out in dividends — 0.8x coverage (a 1% payout ratio).
Union Pacific Corp (UNP) earns $11.98 per share against $5.44 paid out in dividends — 2.2x coverage (a 45% payout ratio).
UNP'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, SWK or UNP?
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 $173 a month from Union Pacific Corp (UNP) at 2.08%.
With a decade or more before the income is needed, UNP's faster dividend growth (6.1% vs 2.6% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: SWK has raised its dividend 28 consecutive years; UNP has raised its dividend 19 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 $661/yr in SWK vs $463/yr in UNP 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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