SHERWIN-WILLIAMS CO/THE (SHW) Stock Fundamental Analysis
USA - NYSE:SHW - US8243481061 - Common Stock
349.56 USD
-0.65 (-0.19%)
349.56 USD
0 (0%)
Taking everything into account, SHW scores 6 out of 10 in our fundamental rating. SHW was compared to 83 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.
1. Profitability
1.1 Basic Checks
In the past year SHW was profitable.
In the past year SHW had a positive cash flow from operations.
In the past 5 years SHW has always been profitable.
In the past 5 years SHW always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 10.03%, SHW belongs to the best of the industry, outperforming 97.59% of the companies in the same industry.
SHW has a Return On Equity of 57.83%. This is amongst the best in the industry. SHW outperforms 100.00% of its industry peers.
The Return On Invested Capital of SHW (14.97%) is better than 95.18% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SHW is significantly above the industry average of 6.34%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.03% | ||
| ROE | 57.83% | ||
| ROIC | 14.97% |
ROA(3y)10.23%
ROA(5y)9.93%
ROE(3y)65.2%
ROE(5y)65.66%
ROIC(3y)15.49%
ROIC(5y)14.7%
1.3 Margins
SHW has a better Profit Margin (11.03%) than 89.16% of its industry peers.
In the last couple of years the Profit Margin of SHW has grown nicely.
SHW has a better Operating Margin (15.85%) than 81.93% of its industry peers.
In the last couple of years the Operating Margin of SHW has grown nicely.
SHW's Gross Margin of 48.87% is amongst the best of the industry. SHW outperforms 93.98% of its industry peers.
In the last couple of years the Gross Margin of SHW has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.85% | ||
| PM (TTM) | 11.03% | ||
| GM | 48.87% |
OM growth 3Y6.82%
OM growth 5Y3.75%
PM growth 3Y7.49%
PM growth 5Y6.16%
GM growth 3Y4.21%
GM growth 5Y1.54%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SHW is creating some value.
Compared to 1 year ago, SHW has less shares outstanding
SHW has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, SHW has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.24 indicates that SHW is not in any danger for bankruptcy at the moment.
The Altman-Z score of SHW (4.24) is better than 89.16% of its industry peers.
SHW has a debt to FCF ratio of 4.96. This is a neutral value as SHW would need 4.96 years to pay back of all of its debts.
The Debt to FCF ratio of SHW (4.96) is better than 83.13% of its industry peers.
A Debt/Equity ratio of 2.17 is on the high side and indicates that SHW has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.17, SHW is doing worse than 83.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.17 | ||
| Debt/FCF | 4.96 | ||
| Altman-Z | 4.24 |
ROIC/WACC1.71
WACC8.73%
2.3 Liquidity
SHW has a Current Ratio of 0.78. This is a bad value and indicates that SHW is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.78, SHW is doing worse than 92.77% of the companies in the same industry.
SHW has a Quick Ratio of 0.78. This is a bad value and indicates that SHW is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of SHW (0.48) is worse than 91.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.48 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.93% 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.
SHW shows a small growth in Revenue. In the last year, the Revenue has grown by 0.31%.
SHW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.23% yearly.
EPS 1Y (TTM)1.93%
EPS 3Y11.65%
EPS 5Y10.02%
EPS Q2Q%-8.65%
Revenue 1Y (TTM)0.31%
Revenue growth 3Y5.02%
Revenue growth 5Y5.23%
Sales Q2Q%0.69%
3.2 Future
Based on estimates for the next years, SHW will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.27% on average per year.
The Revenue is expected to grow by 3.87% on average over the next years.
EPS Next Y0.95%
EPS Next 2Y6.48%
EPS Next 3Y8.74%
EPS Next 5Y8.27%
Revenue Next Year0.46%
Revenue Next 2Y2.52%
Revenue Next 3Y3.38%
Revenue Next 5Y3.87%
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 stable.
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
SHW is valuated quite expensively with a Price/Earnings ratio of 31.52.
The rest of the industry has a similar Price/Earnings ratio as SHW.
The average S&P500 Price/Earnings ratio is at 27.41. SHW is around the same levels.
The Price/Forward Earnings ratio is 27.21, 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 63.86% of the companies listed in the same industry.
SHW is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.88, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.52 | ||
| Fwd PE | 27.21 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SHW indicates a slightly more expensive valuation: SHW is more expensive than 73.49% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as SHW.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.45 | ||
| EV/EBITDA | 22.3 |
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.
The excellent profitability rating of SHW may justify a higher PE ratio.
PEG (NY)33.16
PEG (5Y)3.15
EPS Next 2Y6.48%
EPS Next 3Y8.74%
5. Dividend
5.1 Amount
SHW has a yearly dividend return of 0.86%, which is pretty low.
Compared to an average industry Dividend Yield of 3.43, SHW has a dividend in line with its industry peers.
With a Dividend Yield of 0.86, SHW pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
5.2 History
On average, the dividend of SHW grows each year by 13.53%, 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)13.53%
Div Incr Years21
Div Non Decr Years21
5.3 Sustainability
SHW pays out 29.89% of its income as dividend. This is a sustainable payout ratio.
The dividend of SHW is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP29.89%
EPS Next 2Y6.48%
EPS Next 3Y8.74%
349.56
-0.65 (-0.19%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners83.59%
Inst Owner Change0.37%
Ins Owners0.06%
Ins Owner Change-3.84%
Market Cap87.16B
Analysts72.73
Price Target387.72 (10.92%)
Short Float %2.01%
Short Ratio2.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
Yearly Dividend2.86
Dividend Growth(5Y)13.53%
DP29.89%
Div Incr Years21
Div Non Decr Years21
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-4.39%
Min EPS beat(2)-12.08%
Max EPS beat(2)3.31%
EPS beat(4)2
Avg EPS beat(4)-3.57%
Min EPS beat(4)-12.08%
Max EPS beat(4)3.31%
EPS beat(8)4
Avg EPS beat(8)0.23%
EPS beat(12)8
Avg EPS beat(12)3.8%
EPS beat(16)9
Avg EPS beat(16)1.85%
Revenue beat(2)0
Avg Revenue beat(2)-1.75%
Min Revenue beat(2)-2.75%
Max Revenue beat(2)-0.75%
Revenue beat(4)0
Avg Revenue beat(4)-1.62%
Min Revenue beat(4)-2.75%
Max Revenue beat(4)-0.75%
Revenue beat(8)1
Avg Revenue beat(8)-1.47%
Revenue beat(12)4
Avg Revenue beat(12)-0.21%
Revenue beat(16)6
Avg Revenue beat(16)-0.39%
PT rev (1m)0.96%
PT rev (3m)-1.04%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.1%
EPS NY rev (1m)-4.67%
EPS NY rev (3m)-4.69%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-1.49%
Revenue NY rev (1m)-0.27%
Revenue NY rev (3m)-0.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.52 | ||
| Fwd PE | 27.21 | ||
| P/S | 3.78 | ||
| P/FCF | 40.45 | ||
| P/OCF | 28.48 | ||
| P/B | 19.8 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.3 |
EPS(TTM)11.09
EY3.17%
EPS(NY)12.85
Fwd EY3.67%
FCF(TTM)8.64
FCFY2.47%
OCF(TTM)12.28
OCFY3.51%
SpS92.57
BVpS17.65
TBVpS-27.88
PEG (NY)33.16
PEG (5Y)3.15
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.03% | ||
| ROE | 57.83% | ||
| ROCE | 21.31% | ||
| ROIC | 14.97% | ||
| ROICexc | 15.19% | ||
| ROICexgc | 38.96% | ||
| OM | 15.85% | ||
| PM (TTM) | 11.03% | ||
| GM | 48.87% | ||
| FCFM | 9.34% |
ROA(3y)10.23%
ROA(5y)9.93%
ROE(3y)65.2%
ROE(5y)65.66%
ROIC(3y)15.49%
ROIC(5y)14.7%
ROICexc(3y)15.7%
ROICexc(5y)14.9%
ROICexgc(3y)47.86%
ROICexgc(5y)48.91%
ROCE(3y)20.83%
ROCE(5y)19.67%
ROICexcg growth 3Y0.33%
ROICexcg growth 5Y1.49%
ROICexc growth 3Y8.3%
ROICexc growth 5Y7.54%
OM growth 3Y6.82%
OM growth 5Y3.75%
PM growth 3Y7.49%
PM growth 5Y6.16%
GM growth 3Y4.21%
GM growth 5Y1.54%
F-Score6
Asset Turnover0.91
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.17 | ||
| Debt/FCF | 4.96 | ||
| Debt/EBITDA | 2.22 | ||
| Cap/Depr | 141.34% | ||
| Cap/Sales | 3.93% | ||
| Interest Coverage | 8.86 | ||
| Cash Conversion | 71.19% | ||
| Profit Quality | 84.66% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.48 | ||
| Altman-Z | 4.24 |
F-Score6
WACC8.73%
ROIC/WACC1.71
Cap/Depr(3y)141.7%
Cap/Depr(5y)108.46%
Cap/Sales(3y)3.8%
Cap/Sales(5y)2.98%
Profit Quality(3y)83.69%
Profit Quality(5y)100.89%
High Growth Momentum
Growth
EPS 1Y (TTM)1.93%
EPS 3Y11.65%
EPS 5Y10.02%
EPS Q2Q%-8.65%
EPS Next Y0.95%
EPS Next 2Y6.48%
EPS Next 3Y8.74%
EPS Next 5Y8.27%
Revenue 1Y (TTM)0.31%
Revenue growth 3Y5.02%
Revenue growth 5Y5.23%
Sales Q2Q%0.69%
Revenue Next Year0.46%
Revenue Next 2Y2.52%
Revenue Next 3Y3.38%
Revenue Next 5Y3.87%
EBIT growth 1Y-1.75%
EBIT growth 3Y12.18%
EBIT growth 5Y9.18%
EBIT Next Year14.67%
EBIT Next 3Y10.98%
EBIT Next 5Y7.82%
FCF growth 1Y23.11%
FCF growth 3Y3.62%
FCF growth 5Y0.9%
OCF growth 1Y18.87%
OCF growth 3Y12%
OCF growth 5Y6.32%