Stanley Black & Decker, Inc. (SWK): A Bull Case Theory

We came across a bullish thesis on Stanley Black & Decker, Inc. on R. Dennis’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on SWK. Stanley Black & Decker, Inc.'s share was trading at $79.32 as of January 28th. SWK’s trailing and forward P/E were 27.35 and 12.64 respectively according to Yahoo Finance.

Stanley Black & Decker, Inc. provides hand tools, power tools, outdoor products, and related accessories in the United States, Canada, Other Americas, Europe, and Asia. A compelling income opportunity has emerged through a derivative overlay on Stanley Black & Decker (SWK). Selling the Jan 16, 2026 $60 cash-secured put allows investors to collect premium income while earning risk-free interest on collateral, effectively transforming the position into a synthetic high-yield instrument backed by a Dividend King.

The $60 strike is supported by a triad of safety margins: a valuation floor at roughly 13x forward earnings, a dividend yield that would exceed 5.5% at that price, and the company’s ongoing $2 billion cost-reduction program that materially strengthens margins even if revenue growth remains muted. With the stock trading around $72 in early December 2025, the strike offers a 17% downside buffer over a short 45-day window, during which accelerated time decay favors the option seller. SWK’s fundamentals reinforce this cushion—Q3 2025 results showed margin expansion, stable revenues, and strong earnings execution, all underpinned by a powerful brand ecosystem led by DeWalt.

Macro trends such as infrastructure spending, reshoring, and professional renovation demand further stabilize cash flows, offsetting housing softness. While potential tariff escalation presents the most credible risk, SWK’s shift toward Mexico, pricing power, and already-discounted multiples limit the probability of a breakdown toward $60. Technical support zones in the mid-60s add another layer of protection. Overall, the position offers a superior risk-adjusted yield relative to fixed income and equity alternatives, with assignment at $60 representing an attractive long-term entry into a durable industrial franchise.

Previously we covered a bullish thesis on Snap-on Incorporated by William Fleming-Daniels in November 2024, which highlighted the company’s strong margins, disciplined operations, and durable demand across automotive and industrial markets. The stock has appreciated by 2.27% since our coverage. The thesis still stands as fundamentals remain resilient. OppCost shares a similar view but emphasizes Stanley Black & Decker’s income-focused derivative strategy.

Stanley Black & Decker, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held SWK at the end of the third quarter which was 38 in the previous quarter. While we acknowledge the potential of SWK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.