SHERWIN-WILLIAMS CO/THE (SHW)
US8243481061 - Common Stock
SHW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 83 industry peers in the Chemicals industry. While SHW has a great profitability rating, there are some minor concerns on its financial health. SHW has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year SHW was profitable.
SHW had a positive operating cash flow in the past year.
SHW had positive earnings in each of the past 5 years.
In the past 5 years SHW always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.67%, SHW belongs to the top of the industry, outperforming 93.98% of the companies in the same industry.
Looking at the Return On Equity, with a value of 61.54%, SHW belongs to the top of the industry, outperforming 98.80% of the companies in the same industry.
SHW has a Return On Invested Capital of 16.45%. This is amongst the best in the industry. SHW outperforms 96.39% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SHW is significantly above the industry average of 7.24%.
The last Return On Invested Capital (16.45%) for SHW is above the 3 year average (14.39%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.67% | ||
| ROE | 61.54% | ||
| ROIC | 16.45% |
ROA(3y)9.46%
ROA(5y)9.17%
ROE(3y)68.64%
ROE(5y)59.9%
ROIC(3y)14.39%
ROIC(5y)13.77%
1.3 Margins
Looking at the Profit Margin, with a value of 11.09%, SHW belongs to the top of the industry, outperforming 87.95% of the companies in the same industry.
In the last couple of years the Profit Margin of SHW has grown nicely.
SHW's Operating Margin of 16.24% is amongst the best of the industry. SHW outperforms 84.34% of its industry peers.
SHW's Operating Margin has improved in the last couple of years.
SHW has a better Gross Margin (48.46%) than 90.36% of its industry peers.
In the last couple of years the Gross Margin of SHW has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.24% | ||
| PM (TTM) | 11.09% | ||
| GM | 48.46% |
OM growth 3Y0.22%
OM growth 5Y7.74%
PM growth 3Y-2.13%
PM growth 5Y10.38%
GM growth 3Y-0.44%
GM growth 5Y1.98%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so SHW is creating value.
The number of shares outstanding for SHW has been reduced compared to 1 year ago.
Compared to 5 years ago, SHW has less shares outstanding
Compared to 1 year ago, SHW has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.46 indicates that SHW is not in any danger for bankruptcy at the moment.
SHW has a Altman-Z score of 4.46. This is amongst the best in the industry. SHW outperforms 90.36% of its industry peers.
The Debt to FCF ratio of SHW is 4.95, which is a neutral value as it means it would take SHW, 4.95 years of fcf income to pay off all of its debts.
SHW has a better Debt to FCF ratio (4.95) than 69.88% of its industry peers.
SHW has a Debt/Equity ratio of 2.19. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of SHW (2.19) is worse than 89.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.19 | ||
| Debt/FCF | 4.95 | ||
| Altman-Z | 4.46 |
ROIC/WACC1.92
WACC8.58%
2.3 Liquidity
SHW has a Current Ratio of 0.83. This is a bad value and indicates that SHW is not financially healthy enough and could expect problems in meeting its short term obligations.
SHW has a Current ratio of 0.83. This is amonst the worse of the industry: SHW underperforms 93.98% of its industry peers.
A Quick Ratio of 0.51 indicates that SHW may have some problems paying its short term obligations.
The Quick ratio of SHW (0.51) is worse than 92.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.51 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.05% over the past year.
Measured over the past years, SHW shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.87% on average per year.
SHW shows a small growth in Revenue. In the last year, the Revenue has grown by 0.10%.
Measured over the past years, SHW shows a small growth in Revenue. The Revenue has been growing by 5.62% on average per year.
EPS 1Y (TTM)6.05%
EPS 3Y8.09%
EPS 5Y10.87%
EPS Q2Q%5.31%
Revenue 1Y (TTM)0.1%
Revenue growth 3Y7.88%
Revenue growth 5Y5.62%
Sales Q2Q%0.75%
3.2 Future
The Earnings Per Share is expected to grow by 7.66% on average over the next years.
Based on estimates for the next years, SHW will show a small growth in Revenue. The Revenue will grow by 3.58% on average per year.
EPS Next Y10.49%
EPS Next 2Y11.72%
EPS Next 3Y11.82%
EPS Next 5Y7.66%
Revenue Next Year0.54%
Revenue Next 2Y2.45%
Revenue Next 3Y3.4%
Revenue Next 5Y3.58%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 31.26, which means the current valuation is very expensive for SHW.
Based on the Price/Earnings ratio, SHW is valued a bit more expensive than 62.65% of the companies in the same industry.
When comparing the Price/Earnings ratio of SHW to the average of the S&P500 Index (27.20), we can say SHW is valued inline with the index average.
With a Price/Forward Earnings ratio of 26.77, SHW can be considered very expensive at the moment.
SHW's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. SHW is more expensive than 67.47% of the companies in the same industry.
SHW's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.73.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.26 | ||
| Fwd PE | 26.77 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHW is valued a bit more expensive than the industry average as 77.11% of the companies are valued more cheaply.
SHW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.49 | ||
| EV/EBITDA | 22.02 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
SHW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.98
PEG (5Y)2.88
EPS Next 2Y11.72%
EPS Next 3Y11.82%
5. Dividend
5.1 Amount
SHW has a yearly dividend return of 0.84%, which is pretty low.
Compared to an average industry Dividend Yield of 3.35, SHW has a dividend in line with its industry peers.
With a Dividend Yield of 0.84, SHW pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.84% |
5.2 History
The dividend of SHW is nicely growing with an annual growth rate of 16.11%!
SHW has been paying a dividend for at least 10 years, so it has a reliable track record.
SHW has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)16.11%
Div Incr Years21
Div Non Decr Years21
5.3 Sustainability
SHW pays out 27.33% of its income as dividend. This is a sustainable payout ratio.
SHW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP27.33%
EPS Next 2Y11.72%
EPS Next 3Y11.82%
SHERWIN-WILLIAMS CO/THE
NYSE:SHW (12/20/2024, 8:04:00 PM)
After market: 345.47 0 (0%)345.47
+3.09 (+0.9%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners80.2%
Inst Owner Change-0.62%
Ins Owners0.28%
Ins Owner Change-0.17%
Market Cap87.01B
Analysts73.33
Price Target405.88 (17.49%)
Short Float %2.42%
Short Ratio2.86
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.84% |
Dividend Growth(5Y)16.11%
DP27.33%
Div Incr Years21
Div Non Decr Years21
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.3%
Min EPS beat(2)-5.78%
Max EPS beat(2)5.18%
EPS beat(4)1
Avg EPS beat(4)-0.98%
Min EPS beat(4)-5.78%
Max EPS beat(4)5.18%
EPS beat(8)5
Avg EPS beat(8)5.59%
EPS beat(12)7
Avg EPS beat(12)3.29%
EPS beat(16)9
Avg EPS beat(16)3.99%
Revenue beat(2)0
Avg Revenue beat(2)-1.76%
Min Revenue beat(2)-1.92%
Max Revenue beat(2)-1.6%
Revenue beat(4)0
Avg Revenue beat(4)-1.85%
Min Revenue beat(4)-3.47%
Max Revenue beat(4)-0.43%
Revenue beat(8)3
Avg Revenue beat(8)-0.13%
Revenue beat(12)5
Avg Revenue beat(12)-0.12%
Revenue beat(16)8
Avg Revenue beat(16)0.14%
PT rev (1m)3.13%
PT rev (3m)8.71%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.71%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.54%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.85%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.26 | ||
| Fwd PE | 26.77 | ||
| P/S | 3.77 | ||
| P/FCF | 42.49 | ||
| P/OCF | 27.73 | ||
| P/B | 20.93 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.02 |
EPS(TTM)11.05
EY3.2%
EPS(NY)12.9
Fwd EY3.74%
FCF(TTM)8.13
FCFY2.35%
OCF(TTM)12.46
OCFY3.61%
SpS91.54
BVpS16.5
TBVpS-28.42
PEG (NY)2.98
PEG (5Y)2.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.67% | ||
| ROE | 61.54% | ||
| ROCE | 22.35% | ||
| ROIC | 16.45% | ||
| ROICexc | 16.68% | ||
| ROICexgc | 47.55% | ||
| OM | 16.24% | ||
| PM (TTM) | 11.09% | ||
| GM | 48.46% | ||
| FCFM | 8.88% |
ROA(3y)9.46%
ROA(5y)9.17%
ROE(3y)68.64%
ROE(5y)59.9%
ROIC(3y)14.39%
ROIC(5y)13.77%
ROICexc(3y)14.58%
ROICexc(5y)13.95%
ROICexgc(3y)47.96%
ROICexgc(5y)48.5%
ROCE(3y)19.32%
ROCE(5y)18.24%
ROICexcg growth 3Y1.42%
ROICexcg growth 5Y2.02%
ROICexc growth 3Y6.23%
ROICexc growth 5Y11.76%
OM growth 3Y0.22%
OM growth 5Y7.74%
PM growth 3Y-2.13%
PM growth 5Y10.38%
GM growth 3Y-0.44%
GM growth 5Y1.98%
F-Score7
Asset Turnover0.96
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.19 | ||
| Debt/FCF | 4.95 | ||
| Debt/EBITDA | 2.09 | ||
| Cap/Depr | 176.75% | ||
| Cap/Sales | 4.73% | ||
| Interest Coverage | 9.03 | ||
| Cash Conversion | 71.97% | ||
| Profit Quality | 80.07% | ||
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.51 | ||
| Altman-Z | 4.46 |
F-Score7
WACC8.58%
ROIC/WACC1.92
Cap/Depr(3y)106.2%
Cap/Depr(5y)85.61%
Cap/Sales(3y)2.88%
Cap/Sales(5y)2.42%
Profit Quality(3y)91.27%
Profit Quality(5y)111.21%
High Growth Momentum
Growth
EPS 1Y (TTM)6.05%
EPS 3Y8.09%
EPS 5Y10.87%
EPS Q2Q%5.31%
EPS Next Y10.49%
EPS Next 2Y11.72%
EPS Next 3Y11.82%
EPS Next 5Y7.66%
Revenue 1Y (TTM)0.1%
Revenue growth 3Y7.88%
Revenue growth 5Y5.62%
Sales Q2Q%0.75%
Revenue Next Year0.54%
Revenue Next 2Y2.45%
Revenue Next 3Y3.4%
Revenue Next 5Y3.58%
EBIT growth 1Y5.1%
EBIT growth 3Y8.11%
EBIT growth 5Y13.79%
EBIT Next Year20.25%
EBIT Next 3Y12.55%
EBIT Next 5Y7.17%
FCF growth 1Y118.27%
FCF growth 3Y-5.34%
FCF growth 5Y9.24%
OCF growth 1Y113.02%
OCF growth 3Y1.1%
OCF growth 5Y12.62%