Black & Decker (BDK) is the number-one maker of power tools, and it targets both do-it-yourselfers and professionals. It also makes garden tools, plumbing products, security hardware and cleaning and lighting products.

In the late 1990s, Black & Decker struggled with sluggish sales and falling product prices. But late last year the toolmaker announced a 75% jump in its dividend payout to shareholders, which hadn't budged since 1996. The boost seemed to signal that business had turned the corner. "I had been watching the company as a turnaround," says Nancy Crouse, manager of Delaware Dividend Income fund. "When it raised the dividend, that pushed me over the edge to purchase the stock."

Like other U.S. manufacturers, Black & Decker has been moving production to foreign countries to cut costs. The savings are expected to total $120 million annually by 2005. Standard & Poor's analyst Amrit Tewary says modest sales growth, new products and possible acquisitions, combined with an ongoing share-buyback program, will boost the bottom line this year.

Black & Decker trades at 13 times Tewary's 2004 earnings estimate of $4.24 per share, versus the industry average of 14. The shares yield 1.6%.

--David Landis

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