SHERWIN-WILLIAMS CO/THE (SHW) Stock Fundamental Analysis
USA - NYSE:SHW - US8243481061 - Common Stock
346.8 USD
-2.76 (-0.79%)
346.8 USD
0 (0%)
SHW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 83 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.
SHW had a positive operating cash flow in the past year.
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
SHW has a Return On Assets of 10.03%. This is amongst the best in the industry. SHW outperforms 97.59% of its industry peers.
With an excellent Return On Equity value of 57.83%, SHW belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
SHW has a better Return On Invested Capital (14.97%) 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
Looking at the Profit Margin, with a value of 11.03%, SHW belongs to the top of the industry, outperforming 89.16% 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 15.85%. This is amongst the best in the industry. SHW outperforms 81.93% of its industry peers.
In the last couple of years the Operating Margin of SHW has grown nicely.
SHW has a Gross Margin of 48.87%. This is amongst the best in 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.
SHW has less shares outstanding than it did 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.
2.2 Solvency
SHW has an Altman-Z score of 4.22. This indicates that SHW is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of SHW (4.22) 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.
SHW has a Debt to FCF ratio of 4.96. This is amongst the best in the industry. SHW outperforms 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.
The Debt to Equity ratio of SHW (2.17) is worse than 83.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.17 | ||
| Debt/FCF | 4.96 | ||
| Altman-Z | 4.22 |
ROIC/WACC1.7
WACC8.81%
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.
A Quick Ratio of 0.48 indicates that SHW may have some problems paying 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
SHW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.93%.
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.
Looking at the last year, SHW shows a small growth in Revenue. The Revenue has grown by 0.31% in the last year.
The Revenue has been growing slightly by 5.23% on average over the past years.
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
The Earnings Per Share is expected to grow by 8.27% on average over the next years. This is quite good.
Based on estimates for the next years, SHW will show a small growth in Revenue. The Revenue will grow by 3.87% on average per year.
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
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 31.27, which means the current valuation is very expensive for SHW.
SHW's Price/Earnings is on the same level as the industry average.
SHW is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.38, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 27.00, the valuation of SHW can be described as expensive.
Based on the Price/Forward Earnings ratio, SHW is valued a bit more expensive than the industry average as 61.45% of the companies are valued more cheaply.
SHW is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.27 | ||
| Fwd PE | 27 |
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 72.29% of the companies listed in the same industry.
SHW's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.13 | ||
| EV/EBITDA | 22.14 |
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)32.9
PEG (5Y)3.12
EPS Next 2Y6.48%
EPS Next 3Y8.74%
5. Dividend
5.1 Amount
SHW has a yearly dividend return of 0.90%, which is pretty low.
Compared to an average industry Dividend Yield of 3.47, SHW is paying slightly less dividend.
With a Dividend Yield of 0.90, SHW pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
5.2 History
The dividend of SHW is nicely growing with an annual growth rate of 13.53%!
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
29.89% 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.
DP29.89%
EPS Next 2Y6.48%
EPS Next 3Y8.74%
346.8
-2.76 (-0.79%)
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 Cap86.47B
Analysts72.73
Price Target387.72 (11.8%)
Short Float %2.01%
Short Ratio2.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
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)-0.82%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.1%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.7%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-1.49%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.27 | ||
| Fwd PE | 27 | ||
| P/S | 3.75 | ||
| P/FCF | 40.13 | ||
| P/OCF | 28.25 | ||
| P/B | 19.65 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.14 |
EPS(TTM)11.09
EY3.2%
EPS(NY)12.85
Fwd EY3.7%
FCF(TTM)8.64
FCFY2.49%
OCF(TTM)12.28
OCFY3.54%
SpS92.57
BVpS17.65
TBVpS-27.88
PEG (NY)32.9
PEG (5Y)3.12
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 | 4.22 |
F-Score6
WACC8.81%
ROIC/WACC1.7
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%