SHERWIN-WILLIAMS CO/THE (SHW) Stock Fundamental Analysis
NYSE:SHW - New York Stock Exchange, Inc. - US8243481061 - Common Stock - Currency: USD
SHW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 85 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
SHW had positive earnings in the past year.
In the past year SHW had a positive cash flow from operations.
SHW had positive earnings in each of the past 5 years.
Each year in the past 5 years SHW had a positive operating cash flow.
1.2 Ratios
SHW has a Return On Assets of 10.88%. This is amongst the best in the industry. SHW outperforms 96.47% of its industry peers.
The Return On Equity of SHW (64.89%) is better than 100.00% of its industry peers.
SHW's Return On Invested Capital of 15.78% is amongst the best of the industry. SHW outperforms 96.47% of its industry peers.
SHW had an Average Return On Invested Capital over the past 3 years of 15.49%. This is significantly above the industry average of 6.84%.
The last Return On Invested Capital (15.78%) for SHW is above the 3 year average (15.49%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.88% | ||
| ROE | 64.89% | ||
| ROIC | 15.78% |
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
With an excellent Profit Margin value of 11.63%, SHW belongs to the best of the industry, outperforming 89.41% of the companies in the same industry.
In the last couple of years the Profit Margin of SHW has grown nicely.
SHW has a Operating Margin of 16.45%. This is amongst the best in the industry. SHW outperforms 82.35% of its industry peers.
SHW's Operating Margin has improved in the last couple of years.
SHW's Gross Margin of 48.72% is amongst the best of the industry. SHW outperforms 92.94% of its industry peers.
SHW's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.45% | ||
| PM (TTM) | 11.63% | ||
| GM | 48.72% |
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
SHW has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating 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 4.38 indicates that SHW is not in any danger for bankruptcy at the moment.
SHW's Altman-Z score of 4.38 is amongst the best of the industry. SHW outperforms 89.41% of its industry peers.
SHW has a debt to FCF ratio of 4.95. This is a neutral value as SHW would need 4.95 years to pay back of all of its debts.
SHW has a Debt to FCF ratio of 4.95. This is in the better half of the industry: SHW outperforms 77.65% of its industry peers.
SHW has a Debt/Equity ratio of 2.33. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 2.33, SHW is doing worse than 84.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.33 | ||
| Debt/FCF | 4.95 | ||
| Altman-Z | 4.38 |
ROIC/WACC1.82
WACC8.67%
2.3 Liquidity
SHW has a Current Ratio of 0.77. 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 Current ratio of SHW (0.77) is worse than 90.59% of its industry peers.
SHW has a Quick Ratio of 0.77. 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 worse Quick ratio (0.45) than 91.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.45 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.98% over the past year.
SHW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.02% yearly.
SHW shows a small growth in Revenue. In the last year, the Revenue has grown by 0.26%.
SHW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.23% yearly.
EPS 1Y (TTM)8.98%
EPS 3Y11.65%
EPS 5Y10.02%
EPS Q2Q%3.69%
Revenue 1Y (TTM)0.26%
Revenue growth 3Y5.02%
Revenue growth 5Y5.23%
Sales Q2Q%-1.15%
3.2 Future
SHW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.32% yearly.
SHW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.46% yearly.
EPS Next Y5.93%
EPS Next 2Y8.68%
EPS Next 3Y10.02%
EPS Next 5Y8.32%
Revenue Next Year1.41%
Revenue Next 2Y3.05%
Revenue Next 3Y3.69%
Revenue Next 5Y4.46%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 31.03 indicates a quite expensive valuation of SHW.
Based on the Price/Earnings ratio, SHW is valued a bit more expensive than 60.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.45, SHW is valued at the same level.
The Price/Forward Earnings ratio is 26.45, which means the current valuation is very expensive for SHW.
SHW's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. SHW is more expensive than 61.18% of the companies in the same industry.
SHW is valuated rather expensively when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.03 | ||
| Fwd PE | 26.45 |
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 69.41% of the companies listed 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 | 40.78 | ||
| EV/EBITDA | 22.05 |
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)5.23
PEG (5Y)3.1
EPS Next 2Y8.68%
EPS Next 3Y10.02%
5. Dividend
5.1 Amount
With a yearly dividend of 0.89%, SHW is not a good candidate for dividend investing.
SHW's Dividend Yield is comparable with the industry average which is at 3.58.
With a Dividend Yield of 0.89, SHW pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)13.53%
Div Incr Years21
Div Non Decr Years21
5.3 Sustainability
27.66% of the earnings are spent on dividend by SHW. This is a low number and sustainable payout ratio.
SHW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP27.66%
EPS Next 2Y8.68%
EPS Next 3Y10.02%
354
+1.49 (+0.42%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners82.53%
Inst Owner Change-52.21%
Ins Owners0.07%
Ins Owner Change-0.78%
Market Cap88.71B
Analysts72.12
Price Target390.92 (10.43%)
Short Float %1.83%
Short Ratio2.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
Yearly Dividend2.86
Dividend Growth(5Y)13.53%
DP27.66%
Div Incr Years21
Div Non Decr Years21
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.8%
Min EPS beat(2)0.29%
Max EPS beat(2)3.31%
EPS beat(4)3
Avg EPS beat(4)0.75%
Min EPS beat(4)-5.78%
Max EPS beat(4)5.18%
EPS beat(8)5
Avg EPS beat(8)4.35%
EPS beat(12)8
Avg EPS beat(12)3.64%
EPS beat(16)9
Avg EPS beat(16)2.47%
Revenue beat(2)0
Avg Revenue beat(2)-2.07%
Min Revenue beat(2)-2.75%
Max Revenue beat(2)-1.39%
Revenue beat(4)0
Avg Revenue beat(4)-1.92%
Min Revenue beat(4)-2.75%
Max Revenue beat(4)-1.39%
Revenue beat(8)2
Avg Revenue beat(8)-1.07%
Revenue beat(12)4
Avg Revenue beat(12)-0.44%
Revenue beat(16)6
Avg Revenue beat(16)-0.4%
PT rev (1m)-0.02%
PT rev (3m)-1.18%
EPS NQ rev (1m)0.15%
EPS NQ rev (3m)-2.37%
EPS NY rev (1m)0.01%
EPS NY rev (3m)-1.24%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)-1.79%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-1.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.03 | ||
| Fwd PE | 26.45 | ||
| P/S | 3.85 | ||
| P/FCF | 40.78 | ||
| P/OCF | 28.15 | ||
| P/B | 21.48 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.05 |
EPS(TTM)11.41
EY3.22%
EPS(NY)13.38
Fwd EY3.78%
FCF(TTM)8.68
FCFY2.45%
OCF(TTM)12.57
OCFY3.55%
SpS91.93
BVpS16.48
TBVpS-28.22
PEG (NY)5.23
PEG (5Y)3.1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.88% | ||
| ROE | 64.89% | ||
| ROCE | 22.62% | ||
| ROIC | 15.78% | ||
| ROICexc | 15.95% | ||
| ROICexgc | 40.91% | ||
| OM | 16.45% | ||
| PM (TTM) | 11.63% | ||
| GM | 48.72% | ||
| FCFM | 9.44% |
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-Score7
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.33 | ||
| Debt/FCF | 4.95 | ||
| Debt/EBITDA | 2.18 | ||
| Cap/Depr | 154.43% | ||
| Cap/Sales | 4.23% | ||
| Interest Coverage | 9.04 | ||
| Cash Conversion | 71.26% | ||
| Profit Quality | 81.17% | ||
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.45 | ||
| Altman-Z | 4.38 |
F-Score7
WACC8.67%
ROIC/WACC1.82
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)8.98%
EPS 3Y11.65%
EPS 5Y10.02%
EPS Q2Q%3.69%
EPS Next Y5.93%
EPS Next 2Y8.68%
EPS Next 3Y10.02%
EPS Next 5Y8.32%
Revenue 1Y (TTM)0.26%
Revenue growth 3Y5.02%
Revenue growth 5Y5.23%
Sales Q2Q%-1.15%
Revenue Next Year1.41%
Revenue Next 2Y3.05%
Revenue Next 3Y3.69%
Revenue Next 5Y4.46%
EBIT growth 1Y4.86%
EBIT growth 3Y12.18%
EBIT growth 5Y9.18%
EBIT Next Year19.61%
EBIT Next 3Y12.15%
EBIT Next 5Y7.86%
FCF growth 1Y76.34%
FCF growth 3Y3.62%
FCF growth 5Y0.9%
OCF growth 1Y59%
OCF growth 3Y12%
OCF growth 5Y6.32%