SHERWIN-WILLIAMS CO/THE (SHW) Stock Fundamental Analysis
NYSE:SHW - New York Stock Exchange, Inc. - US8243481061 - Common Stock - Currency: USD
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. SHW scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, SHW is valued expensive at the moment.
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.
In the past 5 years SHW always reported a positive cash flow from operatings.
1.2 Ratios
SHW's Return On Assets of 10.88% is amongst the best of the industry. SHW outperforms 96.47% of its industry peers.
With an excellent Return On Equity value of 64.89%, SHW belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
SHW has a Return On Invested Capital of 15.78%. This is amongst the best in the industry. SHW outperforms 96.47% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SHW is significantly above the industry average of 6.81%.
The 3 year average ROIC (15.49%) for SHW is below the current ROIC(15.78%), indicating increased profibility in the last year.
| 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
SHW has a better Profit Margin (11.63%) than 89.41% of its industry peers.
SHW's Profit Margin has improved in the last couple of years.
SHW's Operating Margin of 16.45% is amongst the best of the industry. SHW outperforms 82.35% of its industry peers.
In the last couple of years the Operating Margin of SHW has grown nicely.
The Gross Margin of SHW (48.72%) is better than 92.94% of its industry peers.
In the last couple of years the Gross Margin of SHW has grown nicely.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SHW is creating some value.
The number of shares outstanding for SHW has been reduced compared to 1 year ago.
Compared to 5 years ago, SHW has less shares outstanding
Compared to 1 year ago, SHW has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.28 indicates that SHW is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 4.28, SHW belongs to the best of the industry, outperforming 90.59% of the companies in the same industry.
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.
The Debt to FCF ratio of SHW (4.95) is better than 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.
With a Debt to Equity ratio value of 2.33, SHW is not doing good in the industry: 84.71% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.33 | ||
| Debt/FCF | 4.95 | ||
| Altman-Z | 4.28 |
ROIC/WACC1.76
WACC8.96%
2.3 Liquidity
A Current Ratio of 0.77 indicates that SHW may have some problems paying its short term obligations.
The Current ratio of SHW (0.77) is worse than 90.59% of its industry peers.
A Quick Ratio of 0.45 indicates that SHW may have some problems paying its short term obligations.
SHW's Quick ratio of 0.45 is on the low side compared to the rest of the industry. SHW is outperformed by 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 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 0.20%.
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)0.2%
Revenue growth 3Y5.02%
Revenue growth 5Y5.23%
Sales Q2Q%0.69%
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.
The Revenue is expected to grow by 4.46% on average over the next years.
EPS Next Y5.9%
EPS Next 2Y8.67%
EPS Next 3Y9.98%
EPS Next 5Y8.32%
Revenue Next Year1.35%
Revenue Next 2Y3.03%
Revenue Next 3Y3.67%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 30.67, the valuation of SHW can be described as expensive.
Based on the Price/Earnings ratio, SHW is valued a bit more expensive than 60.00% of the companies in the same industry.
SHW is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.05, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 25.42, SHW can be considered very expensive at the moment.
SHW's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 37.67, SHW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.67 | ||
| Fwd PE | 25.42 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHW is valued a bit more expensive than the industry average as 69.41% of the companies are valued more cheaply.
SHW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.18 | ||
| EV/EBITDA | 21.26 |
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)5.2
PEG (5Y)3.06
EPS Next 2Y8.67%
EPS Next 3Y9.98%
5. Dividend
5.1 Amount
SHW has a yearly dividend return of 0.93%, which is pretty low.
SHW's Dividend Yield is comparable with the industry average which is at 3.55.
With a Dividend Yield of 0.93, SHW pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
5.2 History
On average, the dividend of SHW grows each year by 13.53%, which is quite nice.
SHW has been paying a dividend for at least 10 years, so it has 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
27.66% 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.
DP27.66%
EPS Next 2Y8.67%
EPS Next 3Y9.98%
340.1
-0.11 (-0.03%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners82.53%
Inst Owner Change-0.11%
Ins Owners0.07%
Ins Owner Change-0.78%
Market Cap85.23B
Analysts72.12
Price Target391.55 (15.13%)
Short Float %2.14%
Short Ratio3.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
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)0.16%
PT rev (3m)1.66%
EPS NQ rev (1m)0.02%
EPS NQ rev (3m)-2.02%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)-0.47%
Revenue NQ rev (1m)-0.24%
Revenue NQ rev (3m)-1.65%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)-1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.67 | ||
| Fwd PE | 25.42 | ||
| P/S | 3.7 | ||
| P/FCF | 39.18 | ||
| P/OCF | 27.05 | ||
| P/B | 20.64 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.26 |
EPS(TTM)11.09
EY3.26%
EPS(NY)13.38
Fwd EY3.93%
FCF(TTM)8.68
FCFY2.55%
OCF(TTM)12.57
OCFY3.7%
SpS91.93
BVpS16.48
TBVpS-28.22
PEG (NY)5.2
PEG (5Y)3.06
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 | 4.28 |
F-Score7
WACC8.96%
ROIC/WACC1.76
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 Y5.9%
EPS Next 2Y8.67%
EPS Next 3Y9.98%
EPS Next 5Y8.32%
Revenue 1Y (TTM)0.2%
Revenue growth 3Y5.02%
Revenue growth 5Y5.23%
Sales Q2Q%0.69%
Revenue Next Year1.35%
Revenue Next 2Y3.03%
Revenue Next 3Y3.67%
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%