Selected ratios are shown below for two competing toolmakers, Stanley Black & Decker, Inc. and Snap-On Incorporated.
_____________________Stanley Black & Decker Snap-On
Payout ratio.....................................35.9%.................................26.1%
Dividend yield ..................................2.1%...................................1.4%
Basic earnings per share (in U.S. $).$5.96..................................$8.24
Return on common shareholders' equity...14.4%.......................20.2%
Instructions
Which of the two companies' shares would you prefer to purchase if you were looking for an income-oriented investment to supplement your income? Explain which ratios you used to support your answer. Based on just the information above, which company's shares may have the best chance for future price appreciation?