SHERWIN-WILLIAMS CO/THE (SHW) Stock Fundamental Analysis
NYSE:SHW - New York Stock Exchange, Inc. - US8243481061 - Common Stock - Currency: USD
Overall SHW gets a fundamental rating of 5 out of 10. We evaluated SHW against 84 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.
SHW had a positive operating cash flow in the past year.
In the past 5 years SHW has always been profitable.
Each year in the past 5 years SHW had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 10.03%, SHW belongs to the best of the industry, outperforming 97.62% of the companies in the same industry.
SHW has a better Return On Equity (57.83%) than 100.00% of its industry peers.
SHW has a Return On Invested Capital of 14.97%. This is amongst the best in the industry. SHW outperforms 95.24% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SHW is significantly above the industry average of 6.53%.
| 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's Profit Margin of 11.03% is amongst the best of the industry. SHW outperforms 89.29% of its industry peers.
In the last couple of years the Profit Margin of SHW has grown nicely.
With an excellent Operating Margin value of 15.85%, SHW belongs to the best of the industry, outperforming 80.95% of the companies in the same industry.
SHW's Operating Margin has improved in the last couple of years.
SHW has a better Gross Margin (48.87%) than 92.86% 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.
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 4.38 indicates that SHW is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 4.38, SHW belongs to the best of the industry, outperforming 90.48% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 4.96, SHW is in the better half of the industry, outperforming 79.76% of the companies in the same industry.
A Debt/Equity ratio of 2.17 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 2.17, SHW is doing worse than 84.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.17 | ||
| Debt/FCF | 4.96 | ||
| Altman-Z | 4.38 |
ROIC/WACC1.68
WACC8.89%
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.
SHW's Current ratio of 0.78 is on the low side compared to the rest of the industry. SHW is outperformed by 91.67% of its industry peers.
A Quick Ratio of 0.48 indicates that SHW may have some problems paying its short term obligations.
SHW's Quick ratio of 0.48 is on the low side compared to the rest of the industry. SHW is outperformed by 90.48% 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.
Looking at the last year, SHW shows a small growth in Revenue. The Revenue has grown by 0.31% in the last year.
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)0.31%
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.
The Revenue is expected to grow by 3.87% on average over the next years.
EPS Next Y5.9%
EPS Next 2Y8.67%
EPS Next 3Y9.98%
EPS Next 5Y8.27%
Revenue Next Year0.74%
Revenue Next 2Y2.64%
Revenue Next 3Y3.44%
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
With a Price/Earnings ratio of 33.10, SHW can be considered very expensive at the moment.
SHW's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 26.84. SHW is valued slightly more expensive when compared to this.
SHW is valuated quite expensively with a Price/Forward Earnings ratio of 27.44.
61.90% of the companies in the same industry are cheaper than SHW, based on the Price/Forward Earnings ratio.
SHW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 34.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.1 | ||
| Fwd PE | 27.44 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHW is valued a bit more expensive than 72.62% of the companies in the same industry.
SHW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.48 | ||
| EV/EBITDA | 23.36 |
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.
SHW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.61
PEG (5Y)3.31
EPS Next 2Y8.67%
EPS Next 3Y9.98%
5. Dividend
5.1 Amount
SHW has a yearly dividend return of 0.86%, which is pretty low.
Compared to an average industry Dividend Yield of 3.59, SHW has a dividend in line with its industry peers.
With a Dividend Yield of 0.86, SHW pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
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
29.89% of the earnings are spent on dividend by SHW. This is a low number and sustainable payout ratio.
SHW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP29.89%
EPS Next 2Y8.67%
EPS Next 3Y9.98%
367.13
-0.8 (-0.22%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners83.59%
Inst Owner Change0.36%
Ins Owners0.06%
Ins Owner Change-0.78%
Market Cap91.54B
Analysts72.12
Price Target384.02 (4.6%)
Short Float %1.43%
Short Ratio1.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
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)-1.76%
PT rev (3m)-1.79%
EPS NQ rev (1m)-3.02%
EPS NQ rev (3m)-5.07%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.02%
Revenue NQ rev (1m)-1.49%
Revenue NQ rev (3m)-2.7%
Revenue NY rev (1m)-0.6%
Revenue NY rev (3m)-0.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.1 | ||
| Fwd PE | 27.44 | ||
| P/S | 3.97 | ||
| P/FCF | 42.48 | ||
| P/OCF | 29.91 | ||
| P/B | 20.8 | ||
| P/tB | N/A | ||
| EV/EBITDA | 23.36 |
EPS(TTM)11.09
EY3.02%
EPS(NY)13.38
Fwd EY3.64%
FCF(TTM)8.64
FCFY2.35%
OCF(TTM)12.28
OCFY3.34%
SpS92.57
BVpS17.65
TBVpS-27.88
PEG (NY)5.61
PEG (5Y)3.31
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 | 4.38 |
F-Score6
WACC8.89%
ROIC/WACC1.68
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 5Y8.27%
Revenue 1Y (TTM)0.31%
Revenue growth 3Y5.02%
Revenue growth 5Y5.23%
Sales Q2Q%0.69%
Revenue Next Year0.74%
Revenue Next 2Y2.64%
Revenue Next 3Y3.44%
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%