SHERWIN-WILLIAMS CO/THE (SHW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SHW - US8243481061 - Common Stock
327.13 USD
-5.98 (-1.8%)
327.41 USD
+0.28 (+0.09%)
Overall SHW gets a fundamental rating of 6 out of 10. We evaluated SHW against 82 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. 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.
In the past 5 years SHW has always been profitable.
SHW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 9.81%, SHW belongs to the top of the industry, outperforming 96.34% of the companies in the same industry.
Looking at the Return On Equity, with a value of 58.12%, SHW belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
SHW has a Return On Invested Capital of 13.81%. This is amongst the best in the industry. SHW outperforms 93.90% 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 6.05%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.81% | ||
| ROE | 58.12% | ||
| ROIC | 13.81% |
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 11.05%, SHW belongs to the best of the industry, outperforming 89.02% of the companies in the same industry.
In the last couple of years the Profit Margin of SHW has grown nicely.
SHW's Operating Margin of 15.81% is fine compared to the rest of the industry. SHW outperforms 79.27% of its industry peers.
In the last couple of years the Operating Margin of SHW has grown nicely.
With an excellent Gross Margin value of 48.88%, SHW belongs to the best of the industry, outperforming 93.90% of the companies in the same industry.
SHW's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.81% | ||
| PM (TTM) | 11.05% | ||
| GM | 48.88% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so SHW is creating 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 3.99 indicates that SHW is not in any danger for bankruptcy at the moment.
SHW has a Altman-Z score of 3.99. This is amongst the best in the industry. SHW outperforms 89.02% of its industry peers.
SHW has a debt to FCF ratio of 4.75. This is a neutral value as SHW would need 4.75 years to pay back of all of its debts.
SHW has a Debt to FCF ratio of 4.75. This is amongst the best in the industry. SHW outperforms 82.93% of its industry peers.
A Debt/Equity ratio of 2.52 is on the high side and indicates that SHW has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.52, SHW is doing worse than 82.93% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.52 | ||
| Debt/FCF | 4.75 | ||
| Altman-Z | 3.99 |
ROIC/WACC1.63
WACC8.45%
2.3 Liquidity
A Current Ratio of 0.82 indicates that SHW may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.82, SHW is doing worse than 93.90% of the companies in the same industry.
SHW has a Quick Ratio of 0.82. 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 Quick ratio, with a value of 0.52, SHW is doing worse than 92.68% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
SHW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.35%.
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 0.96%.
SHW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.23% yearly.
EPS 1Y (TTM)2.35%
EPS 3Y11.65%
EPS 5Y10.02%
EPS Q2Q%6.53%
Revenue 1Y (TTM)0.96%
Revenue growth 3Y5.02%
Revenue growth 5Y5.23%
Sales Q2Q%3.18%
3.2 Future
Based on estimates for the next years, SHW will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.04% on average per year.
The Revenue is expected to grow by 3.89% on average over the next years.
EPS Next Y1.44%
EPS Next 2Y5.92%
EPS Next 3Y8.11%
EPS Next 5Y8.04%
Revenue Next Year1.71%
Revenue Next 2Y3.41%
Revenue Next 3Y3.74%
Revenue Next 5Y3.89%
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 28.92, which means the current valuation is very expensive for SHW.
SHW's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 26.34. SHW is around the same levels.
SHW is valuated quite expensively with a Price/Forward Earnings ratio of 25.73.
SHW's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of SHW to the average of the S&P500 Index (23.56), we can say SHW is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.92 | ||
| Fwd PE | 25.73 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHW is valued a bit more expensive than 76.83% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as SHW.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.42 | ||
| EV/EBITDA | 20.89 |
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)20.03
PEG (5Y)2.89
EPS Next 2Y5.92%
EPS Next 3Y8.11%
5. Dividend
5.1 Amount
With a yearly dividend of 0.94%, SHW is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.98, SHW is paying slightly less dividend.
With a Dividend Yield of 0.94, SHW pays less dividend than the S&P500 average, which is at 2.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.94% |
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 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
30.09% 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.
DP30.09%
EPS Next 2Y5.92%
EPS Next 3Y8.11%
327.13
-5.98 (-1.8%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners84.11%
Inst Owner Change-1.01%
Ins Owners0.06%
Ins Owner Change0.02%
Market Cap81.09B
Revenue(TTM)23.28B
Net Income(TTM)2.57B
Analysts73.75
Price Target393.87 (20.4%)
Short Float %1.92%
Short Ratio2.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.94% |
Yearly Dividend2.86
Dividend Growth(5Y)13.53%
DP30.09%
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)3
Avg EPS beat(4)-1.29%
Min EPS beat(4)-12.08%
Max EPS beat(4)3.31%
EPS beat(8)4
Avg EPS beat(8)-1.14%
EPS beat(12)8
Avg EPS beat(12)3.29%
EPS beat(16)10
Avg EPS beat(16)2.15%
Revenue beat(2)1
Avg Revenue beat(2)0.42%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)1.58%
Revenue beat(4)1
Avg Revenue beat(4)-0.83%
Min Revenue beat(4)-2.75%
Max Revenue beat(4)1.58%
Revenue beat(8)1
Avg Revenue beat(8)-1.34%
Revenue beat(12)4
Avg Revenue beat(12)-0.36%
Revenue beat(16)6
Avg Revenue beat(16)-0.3%
PT rev (1m)2.01%
PT rev (3m)1.59%
EPS NQ rev (1m)-0.44%
EPS NQ rev (3m)-2.46%
EPS NY rev (1m)0.09%
EPS NY rev (3m)0.49%
Revenue NQ rev (1m)0.39%
Revenue NQ rev (3m)2.87%
Revenue NY rev (1m)0.33%
Revenue NY rev (3m)1.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.92 | ||
| Fwd PE | 25.73 | ||
| P/S | 3.48 | ||
| P/FCF | 33.42 | ||
| P/OCF | 24.62 | ||
| P/B | 18.32 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.89 |
EPS(TTM)11.31
EY3.46%
EPS(NY)12.71
Fwd EY3.89%
FCF(TTM)9.79
FCFY2.99%
OCF(TTM)13.29
OCFY4.06%
SpS93.89
BVpS17.85
TBVpS-27.57
PEG (NY)20.03
PEG (5Y)2.89
Graham Number67.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.81% | ||
| ROE | 58.12% | ||
| ROCE | 19.65% | ||
| ROIC | 13.81% | ||
| ROICexc | 13.98% | ||
| ROICexgc | 31.32% | ||
| OM | 15.81% | ||
| PM (TTM) | 11.05% | ||
| GM | 48.88% | ||
| FCFM | 10.42% |
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%
ROICexgc growth 3Y0.33%
ROICexgc 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-Score5
Asset Turnover0.89
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.52 | ||
| Debt/FCF | 4.75 | ||
| Debt/EBITDA | 2.58 | ||
| Cap/Depr | 132.93% | ||
| Cap/Sales | 3.73% | ||
| Interest Coverage | 8.6 | ||
| Cash Conversion | 76.01% | ||
| Profit Quality | 94.35% | ||
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | 3.99 |
F-Score5
WACC8.45%
ROIC/WACC1.63
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)2.35%
EPS 3Y11.65%
EPS 5Y10.02%
EPS Q2Q%6.53%
EPS Next Y1.44%
EPS Next 2Y5.92%
EPS Next 3Y8.11%
EPS Next 5Y8.04%
Revenue 1Y (TTM)0.96%
Revenue growth 3Y5.02%
Revenue growth 5Y5.23%
Sales Q2Q%3.18%
Revenue Next Year1.71%
Revenue Next 2Y3.41%
Revenue Next 3Y3.74%
Revenue Next 5Y3.89%
EBIT growth 1Y-1.67%
EBIT growth 3Y12.18%
EBIT growth 5Y9.18%
EBIT Next Year14.7%
EBIT Next 3Y10.61%
EBIT Next 5Y7.71%
FCF growth 1Y-0.62%
FCF growth 3Y3.62%
FCF growth 5Y0.9%
OCF growth 1Y1.52%
OCF growth 3Y12%
OCF growth 5Y6.32%
SHERWIN-WILLIAMS CO/THE / SHW FAQ
Can you provide the ChartMill fundamental rating for SHERWIN-WILLIAMS CO/THE?
ChartMill assigns a fundamental rating of 6 / 10 to SHW.
What is the valuation status for SHW stock?
ChartMill assigns a valuation rating of 2 / 10 to SHERWIN-WILLIAMS CO/THE (SHW). This can be considered as Overvalued.
Can you provide the profitability details for SHERWIN-WILLIAMS CO/THE?
SHERWIN-WILLIAMS CO/THE (SHW) has a profitability rating of 9 / 10.
What is the valuation of SHERWIN-WILLIAMS CO/THE based on its PE and PB ratios?
The Price/Earnings (PE) ratio for SHERWIN-WILLIAMS CO/THE (SHW) is 28.92 and the Price/Book (PB) ratio is 18.32.
What is the earnings growth outlook for SHERWIN-WILLIAMS CO/THE?
The Earnings per Share (EPS) of SHERWIN-WILLIAMS CO/THE (SHW) is expected to grow by 1.44% in the next year.