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 has an excellent profitability rating, 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.
Each year in the past 5 years SHW has been profitable.
In the past 5 years SHW always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 10.03%, SHW belongs to the best of the industry, outperforming 97.59% of the companies in the same industry.
The Return On Equity of SHW (57.83%) is better than 100.00% of its industry peers.
The Return On Invested Capital of SHW (14.97%) is better than 95.18% 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 6.34%.
| 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
SHW has a better Profit Margin (11.03%) than 89.16% of its industry peers.
SHW's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 15.85%, SHW belongs to the top of the industry, outperforming 81.93% of the companies in the same industry.
SHW's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 48.87%, SHW belongs to the top of the industry, outperforming 93.98% of the companies in the same industry.
SHW's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.85% | ||
| 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
SHW has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it 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
The debt/assets ratio for SHW has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.22 indicates that SHW is not in any danger for bankruptcy at the moment.
SHW has a Altman-Z score of 4.22. This is amongst the best in the industry. SHW outperforms 89.16% of its industry peers.
The Debt to FCF ratio of SHW is 4.96, which is a neutral value as it means it would take SHW, 4.96 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of SHW (4.96) is better than 83.13% of its industry peers.
SHW has a Debt/Equity ratio of 2.17. This is a high value indicating a heavy dependency on external financing.
SHW's Debt to Equity ratio of 2.17 is on the low side compared to the rest of the industry. SHW is outperformed by 83.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.17 | ||
| Debt/FCF | 4.96 | ||
| Altman-Z | 4.22 |
ROIC/WACC1.71
WACC8.75%
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.
SHW has a worse Quick ratio (0.48) than 91.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.48 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.93% over the past year.
The Earnings Per Share has been growing by 10.02% on average over the past years. This is quite good.
SHW shows a small growth in Revenue. In the last year, the Revenue has grown by 0.31%.
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
Based on estimates for the next years, SHW will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.27% on average per year.
Based on estimates for the next years, SHW will show a small growth in Revenue. The Revenue will grow by 3.87% 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.
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.
4. Valuation
4.1 Price/Earnings Ratio
SHW is valuated quite expensively with a Price/Earnings ratio of 31.27.
SHW's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.38. SHW is around the same levels.
The Price/Forward Earnings ratio is 27.00, which means the current valuation is very expensive for SHW.
Based on the Price/Forward Earnings ratio, SHW is valued a bit more expensive than 61.45% of the companies in the same industry.
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
Based on the Enterprise Value to EBITDA ratio, SHW is valued a bit more expensive than 72.29% 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 | 40.13 | ||
| EV/EBITDA | 22.14 |
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)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.
SHW's Dividend Yield is slightly below the industry average, which is at 3.47.
Compared to an average S&P500 Dividend Yield of 2.38, SHW's dividend is way lower than the S&P500 average.
| 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
SHW pays out 29.89% of its income as dividend. This is a 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
WACC8.75%
ROIC/WACC1.71
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%