What's Driving Growth At Stanley Black & Decker? CEO Explains

Apart from being a good dividend yield stock, Stanley Black & Decker, Inc. SWK has also been a winner in terms of stock performance with shares up by 18 percent over the last year and 85 percent in the last five years.

John Lundgren, Stanley Black & Decker CEO, was recently on CNBC to discuss what’s driving the growth at the company.

Highest Organic Growth

“We have always been rewarded or recognized for I'll say operational efficiency, we call it the Stanley Fulfillment System,” Lundgren said. “Lot of working capital turns efficient use of assets, but of late our organic growth has been at the high end of our peer group, 7-8 percent organic growth."

He continued, “And, I think the combination of pretty good operating efficiency, organic growth, a lot of which is new product driven and a lot of which is just good retail partnerships both domestically and abroad. With high single-digit organic growth in a flattish market, I think that’s being recognized and the investment community has responded well.”

Europe Has Been An Outlier

Lundgren was asked if the company is witnessing the high growth in the U.S. He replied, “The U.S. markets depending on your source are probably up low single digits and we are two and three times that in our tools business, our global tools and storage business.”

“But the real outlier for us has been Europe. Five or six quarters in a row, we have have been high single-digit organic growth in Europe in a market that’s flat at best and that’s a combination of really, really good […] and user acceptance of a variety of new products,” Lundgren said.