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SHERWIN-WILLIAMS CO/THE (SHW) Stock Fundamental Analysis

NYSE:SHW - New York Stock Exchange, Inc. - US8243481061 - Common Stock

357.97  -3.55 (-0.98%)

Fundamental Rating

6

Taking everything into account, SHW scores 6 out of 10 in our fundamental rating. SHW was compared to 85 industry peers in the Chemicals industry. While SHW belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. SHW is valued expensive and it does not seem to be growing.


Dividend Valuation Growth Profitability Health

10

1. Profitability

1.1 Basic Checks

SHW had positive earnings in the past year.
SHW had a positive operating cash flow in the past year.
Each year in the past 5 years SHW has been profitable.
Each year in the past 5 years SHW had a positive operating cash flow.
SHW Yearly Net Income VS EBIT VS OCF VS FCFSHW Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B

1.2 Ratios

SHW's Return On Assets of 10.67% is amongst the best of the industry. SHW outperforms 96.39% of its industry peers.
SHW has a Return On Equity of 61.54%. This is amongst the best in the industry. SHW outperforms 100.00% of its industry peers.
The Return On Invested Capital of SHW (16.45%) is better than 98.80% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SHW is significantly above the industry average of 6.57%.
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 RankSector 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%
SHW Yearly ROA, ROE, ROICSHW Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60 80 100

1.3 Margins

With an excellent Profit Margin value of 11.09%, SHW belongs to the best of the industry, outperforming 90.36% 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 16.24%. This is amongst the best in the industry. SHW outperforms 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.
In the last couple of years the Gross Margin of SHW has grown nicely.
Industry RankSector 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%
SHW Yearly Profit, Operating, Gross MarginsSHW Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 10 20 30 40

5

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.
The number of shares outstanding for SHW has been reduced compared to 1 year ago.
SHW has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, SHW has an improved debt to assets ratio.
SHW Yearly Shares OutstandingSHW Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M 250M
SHW Yearly Total Debt VS Total AssetsSHW Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B 20B

2.2 Solvency

SHW has an Altman-Z score of 4.58. This indicates that SHW is financially healthy and has little risk of bankruptcy at the moment.
SHW has a better Altman-Z score (4.58) than 90.36% 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.
The Debt to FCF ratio of SHW (4.95) is better than 72.29% 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 has a worse Debt to Equity ratio (2.19) than 89.16% of its industry peers.
Industry RankSector Rank
Debt/Equity 2.19
Debt/FCF 4.95
Altman-Z 4.58
ROIC/WACC1.9
WACC8.64%
SHW Yearly LT Debt VS Equity VS FCFSHW Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B

2.3 Liquidity

A Current Ratio of 0.83 indicates that SHW may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.83, SHW is doing worse than 92.77% of the companies in the same industry.
SHW has a Quick 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 worse Quick ratio (0.51) than 91.57% of its industry peers.
Industry RankSector Rank
Current Ratio 0.83
Quick Ratio 0.51
SHW Yearly Current Assets VS Current LiabilitesSHW Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B

3

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 6.05% over the past year.
The Earnings Per Share has been growing by 10.87% on average over the past years. This is quite good.
Looking at the last year, SHW shows a small growth in Revenue. The Revenue has grown by 0.10% in the last year.
The Revenue has been growing slightly by 5.62% on average over the past years.
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

Based on estimates for the next years, SHW will show a small growth in Earnings Per Share. The EPS will grow by 7.66% on average per year.
Based on estimates for the next years, SHW will show a small growth in Revenue. The Revenue will grow by 3.69% 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 2Y2.27%
Revenue Next 3Y3.16%
Revenue Next 5Y3.69%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less 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 decreasing.
SHW Yearly Revenue VS EstimatesSHW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 10B 20B 30B
SHW Yearly EPS VS EstimatesSHW Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 5 10 15

2

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 32.40, the valuation of SHW can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of SHW indicates a slightly more expensive valuation: SHW is more expensive than 62.65% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, SHW is valued at the same level.
The Price/Forward Earnings ratio is 27.74, which means the current valuation is very expensive for SHW.
66.27% of the companies in the same industry are cheaper than SHW, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of SHW to the average of the S&P500 Index (24.44), we can say SHW is valued inline with the index average.
Industry RankSector Rank
PE 32.4
Fwd PE 27.74
SHW Price Earnings VS Forward Price EarningsSHW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SHW is valued a bit more expensive than 77.11% of the companies in the same industry.
SHW's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 44.03
EV/EBITDA 22.95
SHW Per share dataSHW EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 -20 40 60 80

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)3.09
PEG (5Y)2.98
EPS Next 2Y11.72%
EPS Next 3Y11.82%

5

5. Dividend

5.1 Amount

SHW has a yearly dividend return of 0.81%, which is pretty low.
SHW's Dividend Yield is comparable with the industry average which is at 3.26.
Compared to an average S&P500 Dividend Yield of 2.28, SHW's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 0.81%

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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)16.11%
Div Incr Years21
Div Non Decr Years21
SHW Yearly Dividends per shareSHW Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.5 1 1.5 2 2.5

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 2Y11.72%
EPS Next 3Y11.82%
SHW Yearly Income VS Free CF VS DividendSHW Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B
SHW Dividend Payout.SHW Dividend Payout, showing the Payout Ratio.SHW Dividend Payout.PayoutRetained Earnings

SHERWIN-WILLIAMS CO/THE

NYSE:SHW (1/22/2025, 11:52:06 AM)

357.97

-3.55 (-0.98%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)10-22 2024-10-22/bmo
Earnings (Next)01-30 2025-01-30/amc
Inst Owners80.2%
Inst Owner Change-0.29%
Ins Owners0.28%
Ins Owner Change-0.17%
Market Cap90.15B
Analysts73.33
Price Target401.52 (12.17%)
Short Float %2.36%
Short Ratio2.69
Dividend
Industry RankSector Rank
Dividend Yield 0.81%
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)-1.08%
PT rev (3m)5.18%
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 RankSector Rank
PE 32.4
Fwd PE 27.74
P/S 3.91
P/FCF 44.03
P/OCF 28.74
P/B 21.69
P/tB N/A
EV/EBITDA 22.95
EPS(TTM)11.05
EY3.09%
EPS(NY)12.9
Fwd EY3.61%
FCF(TTM)8.13
FCFY2.27%
OCF(TTM)12.46
OCFY3.48%
SpS91.54
BVpS16.5
TBVpS-28.42
PEG (NY)3.09
PEG (5Y)2.98
Profitability
Industry RankSector 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 RankSector 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 4.58
F-Score7
WACC8.64%
ROIC/WACC1.9
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 2Y2.27%
Revenue Next 3Y3.16%
Revenue Next 5Y3.69%
EBIT growth 1Y5.1%
EBIT growth 3Y8.11%
EBIT growth 5Y13.79%
EBIT Next Year20.35%
EBIT Next 3Y12.49%
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%