Should Quality Investors Include NYSE:SHW in Their Portfolio?

In this article we will dive into SHERWIN-WILLIAMS CO/THE (NYSE:SHW) as a possible candidate for quality investing. Investors should always do their own research, but we noticed SHERWIN-WILLIAMS CO/THE showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

Key Considerations for Quality Investors.

• SHERWIN-WILLIAMS CO/THE has achieved substantial revenue growth over the past 5 years, with a 5.62% increase. This signifies the company's ability to successfully capture market opportunities and generate sustained revenue growth.
• The ROIC excluding cash and goodwill of SHERWIN-WILLIAMS CO/THE stands at 47.2%, reflecting the company's strong financial management and profitability. This metric underscores its ability to generate favorable returns on the capital invested in its core operations.
• With a Debt/Free Cash Flow Ratio of 4.37, SHERWIN-WILLIAMS CO/THE exhibits solid financial health and responsible debt management practices. This ratio indicates the company's ability to generate ample free cash flow to meet its debt obligations and pursue growth opportunities.
• SHERWIN-WILLIAMS CO/THE demonstrates consistent Profit Quality over the past 5 years, with a strong 111.0%. This indicates the company's ability to generate sustainable and reliable profits, showcasing its long-term profitability and financial stability.
• SHERWIN-WILLIAMS CO/THE has consistently achieved strong EBIT growth over the past 5 years, with a 13.79% increase. This underscores the company's effective management of its operating income and suggests a positive outlook for future profitability.
• The EBIT 5-year growth of SHERWIN-WILLIAMS CO/THE has outpaced its Revenue 5-year growth, reflecting the company's focus on optimizing its profitability and generating sustainable earnings. This trend underscores its strong financial management.

Zooming in on the fundamentals.

At ChartMill, a crucial aspect of their analysis is the assignment of a Fundamental Rating to each stock. This rating, ranging from 0 to 10, is calculated daily by considering numerous fundamental indicators and properties.

Taking everything into account, SHW scores 6 out of 10 in our fundamental rating. SHW was compared to 84 industry peers in the Chemicals industry. SHW scores excellent on profitability, but there are some minor concerns on its financial health. SHW is valied quite expensively at the moment, while it does show a decent growth rate.

For an up to date full fundamental analysis you can check the fundamental report of SHW

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.