Strategic Capital Allocation

We employ an investor-friendly capital allocation approach. Long term, we look to invest half of our free cash flow in accretive acquisitions, and return half to our shareholders through a strong and growing dividend and opportunistic share repurchases. In 2018, we announced nearly $1.4 billion in strategic acquisitions and completed $500 million of share repurchases.

Mergers and Acquisitions


Share Repurchases
in 2018

Our Long-Term Dividend Track Record

We are committed to a strong and growing dividend and target a 30–35 percent payout ratio. This is the 142nd consecutive year we have paid a dividend — the longest consecutive period of dividend payments among NYSE-listed industrials companies — and we have increased it each year for the past 51 consecutive years.

Dividend Per Share Growth

MTD Partnership in Lawn & Garden

Our new strategic partnership with MTD, a global manufacturer of gas-powered outdoor equipment, expands our foothold in the lawn and garden segment. Together, we are looking to grow MTD’s business through cost and revenue opportunities. The potential for growth is exciting as we utilize our respective portfolios of strong brands, bring new innovations, exploiting key technologies such as electrification and autonomous mowing to market, and continue to roll out the Craftsman brand. The future is bright as we bring these new solutions to professional and consumer lawn and garden end users.

Our 20 percent stake in MTD is structured with the option to make a full purchase beginning in 2021. We see this as a compelling long-term investment in an attractive, adjacent market where our brands and technology can flourish.

Nelson Fasteners Acquired for
$440 Million

Nelson brings strong brands, innovative technology, new customer relationships and a leading position in industrial fasteners and systems to our growing Engineered Fastening business. This bolt-on acquisition extends our product line leadership in automotive stud-welding to the general industrial sector as well as expands our portfolio of highly engineered fastening solutions. In addition, Nelson diversifies our end markets with fastener applications in the infrastructure, heavy equipment and defense end markets, carries the prospect for cost and revenue synergy opportunities and greatly enhances our ability to build scale over time.

Announced IES Attachments Acquisition

This bolt-on acquisition of IES, a manufacturer of performance-driven attachment tools for off-highway applications, will be combined with Hydraulic Tools. The move broadens our offerings with additional product lines, expands our independent dealer network and carries a sizeable aftermarket business (approximately 60 percent of revenues). The combined business offers a broad portfolio of attachment solutions, becoming a one-stop shop for our customers — while elevating the attachments business to a meaningful platform for growth.