SHERWIN-WILLIAMS CO/THE (SHW)

US8243481061 - Common Stock

346.89  +4.89 (+1.43%)

Premarket: 346.89 0 (0%)

Fundamental Rating

6

SHW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 85 industry peers in the Chemicals industry. While SHW has a great profitability rating, there are some minor concerns on its financial health. SHW is quite expensive at the moment. It does show a decent growth rate.



10

1. Profitability

1.1 Basic Checks

In the past year SHW was profitable.
In the past year SHW had a positive cash flow from operations.
Each year in the past 5 years SHW has 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 10.41%, SHW belongs to the best of the industry, outperforming 89.41% of the companies in the same industry.
SHW's Return On Equity of 64.29% is amongst the best of the industry. SHW outperforms 100.00% of its industry peers.
The Return On Invested Capital of SHW (16.75%) is better than 94.12% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SHW is significantly above the industry average of 7.53%.
The 3 year average ROIC (14.39%) for SHW is below the current ROIC(16.75%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 10.41%
ROE 64.29%
ROIC 16.75%
ROA(3y)9.46%
ROA(5y)9.17%
ROE(3y)68.64%
ROE(5y)59.9%
ROIC(3y)14.39%
ROIC(5y)13.77%

1.3 Margins

Looking at the Profit Margin, with a value of 10.36%, SHW belongs to the top of the industry, outperforming 81.18% of the companies in the same industry.
In the last couple of years the Profit Margin of SHW has grown nicely.
Looking at the Operating Margin, with a value of 15.63%, SHW belongs to the top of the industry, outperforming 83.53% of the companies in the same industry.
SHW's Operating Margin has improved in the last couple of years.
The Gross Margin of SHW (46.69%) is better than 90.59% of its industry peers.
SHW's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 15.63%
PM (TTM) 10.36%
GM 46.69%
OM growth 3Y0.22%
OM growth 5Y7.74%
PM growth 3Y-2.13%
PM growth 5Y10.38%
GM growth 3Y-0.44%
GM growth 5Y1.98%

5

2. Health

2.1 Basic Checks

SHW has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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 4.54 indicates that SHW is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.54, SHW belongs to the top of the industry, outperforming 88.24% of the companies in the same industry.
SHW has a debt to FCF ratio of 3.74. This is a good value and a sign of high solvency as SHW would need 3.74 years to pay back of all of its debts.
The Debt to FCF ratio of SHW (3.74) is better than 75.29% of its industry peers.
A Debt/Equity ratio of 2.36 is on the high side and indicates that SHW has dependencies on debt financing.
SHW has a worse Debt to Equity ratio (2.36) than 90.59% of its industry peers.
Industry RankSector Rank
Debt/Equity 2.36
Debt/FCF 3.74
Altman-Z 4.54
ROIC/WACC2.02
WACC8.29%

2.3 Liquidity

A Current Ratio of 0.83 indicates that SHW may have some problems paying its short term obligations.
SHW has a worse Current ratio (0.83) than 92.94% 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 94.12% of its industry peers.
Industry RankSector Rank
Current Ratio 0.83
Quick Ratio 0.48

4

3. Growth

3.1 Past

SHW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.31%, which is quite good.
The Earnings Per Share has been growing by 10.87% 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 4.08% in the last year.
Measured over the past years, SHW shows a small growth in Revenue. The Revenue has been growing by 5.62% on average per year.
EPS 1Y (TTM)18.31%
EPS 3Y8.09%
EPS 5Y10.87%
EPS growth Q2Q-4.23%
Revenue 1Y (TTM)4.08%
Revenue growth 3Y7.88%
Revenue growth 5Y5.62%
Revenue growth Q2Q0.41%

3.2 Future

Based on estimates for the next years, SHW will show a small growth in Earnings Per Share. The EPS will grow by 6.66% on average per year.
Based on estimates for the next years, SHW will show a small growth in Revenue. The Revenue will grow by 4.74% on average per year.
EPS Next Y11.1%
EPS Next 2Y11.18%
EPS Next 3Y11.3%
EPS Next 5Y6.66%
Revenue Next Year3.28%
Revenue Next 2Y3.9%
Revenue Next 3Y4.39%
Revenue Next 5Y4.74%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

1

4. Valuation

4.1 Price/Earnings Ratio

SHW is valuated quite expensively with a Price/Earnings ratio of 33.55.
60.00% of the companies in the same industry are cheaper than SHW, based on the Price/Earnings ratio.
SHW is valuated rather expensively when we compare the Price/Earnings ratio to 26.42, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 30.20, the valuation of SHW can be described as expensive.
SHW's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. SHW is more expensive than 61.18% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.74, SHW is valued a bit more expensive.
Industry RankSector Rank
PE 33.55
Fwd PE 30.2

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SHW is valued a bit more expensive than the industry average as 71.76% of the companies are valued more cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SHW is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 33.47
EV/EBITDA 23.04

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)3.02
PEG (5Y)3.09
EPS Next 2Y11.18%
EPS Next 3Y11.3%

5

5. Dividend

5.1 Amount

With a yearly dividend of 0.82%, SHW is not a good candidate for dividend investing.
SHW's Dividend Yield is comparable with the industry average which is at 3.25.
Compared to an average S&P500 Dividend Yield of 2.34, SHW's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 0.82%

5.2 History

The dividend of SHW is nicely growing with an annual growth rate of 16.11%!
SHW has paid a dividend for at least 10 years, which is a reliable track record.
SHW has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)16.11%
Div Incr Years19
Div Non Decr Years19

5.3 Sustainability

SHW pays out 26.11% of its income as dividend. This is a sustainable payout ratio.
SHW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP26.11%
EPS Next 2Y11.18%
EPS Next 3Y11.3%

SHERWIN-WILLIAMS CO/THE

NYSE:SHW (3/27/2024, 8:04:00 PM)

Premarket: 346.89 0 (0%)

346.89

+4.89 (+1.43%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap88.14B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 0.82%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 33.55
Fwd PE 30.2
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.02
PEG (5Y)3.09
Profitability
Industry RankSector Rank
ROA 10.41%
ROE 64.29%
ROCE
ROIC
ROICexc
ROICexgc
OM 15.63%
PM (TTM) 10.36%
GM 46.69%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1
Health
Industry RankSector Rank
Debt/Equity 2.36
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 0.83
Quick Ratio 0.48
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)18.31%
EPS 3Y8.09%
EPS 5Y
EPS growth Q2Q
EPS Next Y11.1%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)4.08%
Revenue growth 3Y7.88%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y