SHERWIN-WILLIAMS CO/THE (SHW) Stock Fundamental Analysis
NYSE:SHW - New York Stock Exchange, Inc. - US8243481061 - Common Stock - Currency: USD
Overall SHW gets a fundamental rating of 6 out of 10. We evaluated SHW against 85 industry peers in the Chemicals industry. While SHW has a great profitability rating, 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.
1. Profitability
1.1 Basic Checks
SHW had positive earnings in the past year.
In the past year SHW had a positive cash flow from operations.
Each year in the past 5 years SHW has been profitable.
Of the past 5 years SHW 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of SHW (10.67%) is better than 95.18% of its industry peers.
SHW's Return On Equity of 61.54% is amongst the best of the industry. SHW outperforms 100.00% of its industry peers.
The Return On Invested Capital of SHW (16.37%) is better than 96.39% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SHW is significantly above the industry average of 6.65%.
The last Return On Invested Capital (16.37%) for SHW is above the 3 year average (15.56%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.67% | ||
| ROE | 61.54% | ||
| ROIC | 16.37% |
ROA(3y)10.23%
ROA(5y)9.93%
ROE(3y)65.2%
ROE(5y)65.66%
ROIC(3y)15.56%
ROIC(5y)14.75%
1.3 Margins
The Profit Margin of SHW (11.09%) is better than 90.36% of its industry peers.
In the last couple of years the Profit Margin of SHW has grown nicely.
The Operating Margin of SHW (16.24%) is better than 85.54% of its industry peers.
SHW's Operating Margin has improved in the last couple of years.
SHW has a Gross Margin of 48.46%. This is amongst the best in the industry. SHW outperforms 91.57% of its industry peers.
SHW's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.24% | ||
| PM (TTM) | 11.09% | ||
| GM | 48.46% |
OM growth 3Y7.29%
OM growth 5Y4.03%
PM growth 3Y7.49%
PM growth 5Y6.16%
GM growth 3Y4.21%
GM growth 5Y1.54%
2. Health
2.1 Basic Checks
SHW has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
SHW has less shares outstanding than it did 1 year ago.
The number of shares outstanding for SHW has been reduced compared to 5 years ago.
The debt/assets ratio for SHW has been reduced compared to a year ago.
2.2 Solvency
SHW has an Altman-Z score of 4.45. This indicates that SHW is financially healthy and has little risk of bankruptcy at the moment.
SHW has a Altman-Z score of 4.45. This is amongst the best in the industry. SHW outperforms 91.57% 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's Debt to FCF ratio of 4.95 is fine compared to the rest of the industry. SHW outperforms 75.90% 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.
SHW's Debt to Equity ratio of 2.19 is on the low side compared to the rest of the industry. SHW is outperformed by 87.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.19 | ||
| Debt/FCF | 4.95 | ||
| Altman-Z | 4.45 |
ROIC/WACC1.87
WACC8.74%
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 92.77% of its industry peers.
A Quick Ratio of 0.51 indicates that SHW may have some problems paying its short term obligations.
SHW has a Quick ratio of 0.51. This is amonst the worse of the industry: SHW underperforms 91.57% 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 grown by an nice 9.57% 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 10.02% on average per year.
The Revenue has been growing slightly by 0.20% in the past year.
The Revenue has been growing slightly by 5.23% on average over the past years.
EPS 1Y (TTM)9.57%
EPS 3Y11.65%
EPS 5Y10.02%
EPS Q2Q%15.47%
Revenue 1Y (TTM)0.2%
Revenue growth 3Y5.02%
Revenue growth 5Y5.23%
Sales Q2Q%0.86%
3.2 Future
Based on estimates for the next years, SHW will show a small growth in Earnings Per Share. The EPS will grow by 6.78% on average per year.
The Revenue is expected to grow by 4.01% on average over the next years.
EPS Next Y7.21%
EPS Next 2Y10.19%
EPS Next 3Y11.08%
EPS Next 5Y6.78%
Revenue Next Year2.51%
Revenue Next 2Y3.73%
Revenue Next 3Y4.4%
Revenue Next 5Y4.01%
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
With a Price/Earnings ratio of 30.41, SHW can be considered very expensive at the moment.
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 (29.63), we can say SHW is valued inline with the index average.
The Price/Forward Earnings ratio is 28.37, which means the current valuation is very expensive for SHW.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SHW indicates a slightly more expensive valuation: SHW is more expensive than 65.06% of the companies listed in the same industry.
SHW is valuated rather expensively when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.41 | ||
| Fwd PE | 28.37 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHW is valued a bit more expensive than 75.90% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SHW is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.38 | ||
| EV/EBITDA | 21.97 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SHW does not grow enough to justify the current Price/Earnings ratio.
SHW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.22
PEG (5Y)3.04
EPS Next 2Y10.19%
EPS Next 3Y11.08%
5. Dividend
5.1 Amount
SHW has a yearly dividend return of 0.90%, which is pretty low.
Compared to an average industry Dividend Yield of 3.28, SHW has a dividend in line with its industry peers.
With a Dividend Yield of 0.90, SHW pays less dividend than the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
5.2 History
On average, the dividend of SHW grows each year by 16.11%, which is quite nice.
SHW has paid a dividend for at least 10 years, which is 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
27.33% of the earnings are spent on dividend by SHW. This is a low number and sustainable payout ratio.
The dividend of SHW is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP27.33%
EPS Next 2Y10.19%
EPS Next 3Y11.08%
344.57
-5.45 (-1.56%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners81.92%
Inst Owner Change-89.11%
Ins Owners0.1%
Ins Owner Change3.01%
Market Cap86.78B
Analysts73.94
Price Target397.61 (15.39%)
Short Float %2.2%
Short Ratio3.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
Yearly Dividend2.43
Dividend Growth(5Y)16.11%
DP27.33%
Div Incr Years21
Div Non Decr Years21
Ex-DateN/A
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)-0.97%
PT rev (3m)-2.04%
EPS NQ rev (1m)-0.44%
EPS NQ rev (3m)-0.44%
EPS NY rev (1m)-5.88%
EPS NY rev (3m)-5.88%
Revenue NQ rev (1m)-0.19%
Revenue NQ rev (3m)-0.19%
Revenue NY rev (1m)-1.38%
Revenue NY rev (3m)-1.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.41 | ||
| Fwd PE | 28.37 | ||
| P/S | 3.76 | ||
| P/FCF | 42.38 | ||
| P/OCF | 27.66 | ||
| P/B | 20.88 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.97 |
EPS(TTM)11.33
EY3.29%
EPS(NY)12.15
Fwd EY3.53%
FCF(TTM)8.13
FCFY2.36%
OCF(TTM)12.46
OCFY3.62%
SpS91.54
BVpS16.5
TBVpS-28.42
PEG (NY)4.22
PEG (5Y)3.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.67% | ||
| ROE | 61.54% | ||
| ROCE | 22.35% | ||
| ROIC | 16.37% | ||
| ROICexc | 16.59% | ||
| ROICexgc | 47.29% | ||
| OM | 16.24% | ||
| PM (TTM) | 11.09% | ||
| GM | 48.46% | ||
| FCFM | 8.88% |
ROA(3y)10.23%
ROA(5y)9.93%
ROE(3y)65.2%
ROE(5y)65.66%
ROIC(3y)15.56%
ROIC(5y)14.75%
ROICexc(3y)15.77%
ROICexc(5y)14.94%
ROICexgc(3y)48.07%
ROICexgc(5y)49.03%
ROCE(3y)20.93%
ROCE(5y)19.73%
ROICexcg growth 3Y0.77%
ROICexcg growth 5Y1.76%
ROICexc growth 3Y8.78%
ROICexc growth 5Y7.82%
OM growth 3Y7.29%
OM growth 5Y4.03%
PM growth 3Y7.49%
PM growth 5Y6.16%
GM growth 3Y4.21%
GM growth 5Y1.54%
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 | 4.45 |
F-Score7
WACC8.74%
ROIC/WACC1.87
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.57%
EPS 3Y11.65%
EPS 5Y10.02%
EPS Q2Q%15.47%
EPS Next Y7.21%
EPS Next 2Y10.19%
EPS Next 3Y11.08%
EPS Next 5Y6.78%
Revenue 1Y (TTM)0.2%
Revenue growth 3Y5.02%
Revenue growth 5Y5.23%
Sales Q2Q%0.86%
Revenue Next Year2.51%
Revenue Next 2Y3.73%
Revenue Next 3Y4.4%
Revenue Next 5Y4.01%
EBIT growth 1Y5.1%
EBIT growth 3Y12.67%
EBIT growth 5Y9.47%
EBIT Next Year21.55%
EBIT Next 3Y13.24%
EBIT Next 5Y6.77%
FCF growth 1Y-16.13%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-3.3%
OCF growth 3YN/A
OCF growth 5YN/A