Should Quality Investors Include NYSE:SHW in Their Portfolio?

Quality investors are looking for the best of the best. Companies which are growing steadily and consistently, but are also in excellent financial condition. We will have a look here to see if SHERWIN-WILLIAMS CO/THE (NYSE:SHW) is suited for quality investing. Investors should of course do their own research, but we spotted SHERWIN-WILLIAMS CO/THE showing up in our Caviar Cruise quality screen, so it may be worth spending some more time on it.

Highlighting Notable Quality Metrics of NYSE:SHW.

• SHERWIN-WILLIAMS CO/THE has demonstrated significant revenue growth over the past 5 years, with a 5.62% increase. This underscores the company's ability to adapt to market dynamics and capitalize on growth opportunities.
• With a notable ROIC excluding cash and goodwill at 56.88%, SHERWIN-WILLIAMS CO/THE demonstrates its commitment to generating sustainable returns for shareholders. This metric emphasizes the company's effective use of capital and its ability to deliver long-term value.
• SHERWIN-WILLIAMS CO/THE maintains a healthy Debt/Free Cash Flow Ratio of 3.74, indicating a strong financial position and prudent debt management. This ratio suggests the company has sufficient free cash flow to cover its debt obligations and highlights its ability to generate cash from operations.
• SHERWIN-WILLIAMS CO/THE exhibits impressive Profit Quality (5-year) with a 111.0% ratio, reflecting its consistent ability to generate high-quality profits. This metric underscores the company's strong financial performance and commitment to delivering sustainable earnings.
• SHERWIN-WILLIAMS CO/THE has consistently achieved strong EBIT growth over the past 5 years, with a 13.79% increase. This underscores the company's effective management of its operating income and suggests a positive outlook for future profitability.
• SHERWIN-WILLIAMS CO/THE demonstrates a remarkable trend where its EBIT 5-year growth exceeds its Revenue 5-year growth. This indicates the company's ability to enhance its profitability through improved cost control and operational efficiency.

Zooming in on the fundamentals.

At ChartMill, a crucial aspect of their analysis is the assignment of a Fundamental Rating to each stock. This rating, ranging from 0 to 10, is calculated daily by considering numerous fundamental indicators and properties.

Overall SHW gets a fundamental rating of 5 out of 10. We evaluated SHW against 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 valied quite expensively at the moment, while it does show a decent growth rate.

Check the latest full fundamental report of SHW for a complete fundamental analysis.

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.