Critical Analysis: Sony (NYSE:SONY) & Stanley Black & Decker (NYSE:SWK)

Sony (NYSE:SONY) and Stanley Black & Decker (NYSE:SWK) are both large-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sony	-2.00%	13.06%	5.22%
Stanley Black & Decker	4.07%	8.78%	3.73%

Analyst Recommendations

This is a breakdown of current recommendations for Sony and Stanley Black & Decker, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sony	1	1	4	1	2.71
Stanley Black & Decker	1	6	3	0	2.20

Sony currently has a consensus target price of $22.00, suggesting a potential downside of 7.93%. Stanley Black & Decker has a consensus target price of $92.88, suggesting a potential upside of 4.23%. Given Stanley Black & Decker’s higher probable upside, analysts clearly believe Stanley Black & Decker is more favorable than Sony.

Dividends

Sony pays an annual dividend of $0.11 per share and has a dividend yield of 0.5%. Stanley Black & Decker pays an annual dividend of $3.36 per share and has a dividend yield of 3.8%. Sony pays out 9.8% of its earnings in the form of a dividend. Stanley Black & Decker pays out 82.0% 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. Stanley Black & Decker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Sony and Stanley Black & Decker”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sony	$82.90 billion	1.70	-$2.16 billion	$1.12	21.33
Stanley Black & Decker	$15.13 billion	0.89	$401.90 million	$4.10	21.73

Stanley Black & Decker has lower revenue, but higher earnings than Sony. Sony 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.

Risk & Volatility

Sony has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Stanley Black & Decker has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Institutional and Insider Ownership

14.1% of Sony shares are held by institutional investors. Comparatively, 87.8% of Stanley Black & Decker shares are held by institutional investors. 7.0% of Sony shares are held by insiders. Comparatively, 0.7% of Stanley Black & Decker shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

About Sony

Sony Group Corporation designs, develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets in Japan, the United States, Europe, China, the Asia-Pacific, and internationally. The company distributes software titles and add-on content through digital networks; network services related to game, video, and music content; and home gaming consoles, packaged and game software, and peripheral devices. It also develops, produces, markets, and distributes recorded music; publishes music; and produces and distributes animation titles, game applications, and various services for music and visual products. In addition, the company produces, acquires, and distributes live-action and animated motion pictures for theatrical release, as well as scripted and animated series, unscripted reality or light entertainment, daytime serials, game shows, television movies, and miniseries and other television programs; operation of television networks and direct-to-consumer streaming services; operates a visual effects and animation unit; and manages a studio facility. Further, it researches, develops, designs, produces, markets, distributes, sells, and services televisions, and video and sound products; interchangeable lens, as well as compact digital, and consumer and professional video cameras; projectors and medical equipment; mobile phones, accessories, and applications; and metal oxide semiconductor image sensors, charge-coupled devices, integration systems, and other semiconductors. Additionally, it offers Internet broadband network services; recording media, and storage media products; and life and non-life insurance, banking, and other services, as well as creates and distributes content for PCs and mobile phones. The company was formerly known as Sony Corporation and changed its name to Sony Group Corporation in April 2021. Sony Group Corporation was incorporated in 1946 and is headquartered in Tokyo, Japan.

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.