SHERWIN-WILLIAMS CO/THE (SHW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SHW - US8243481061 - Common Stock
333.11 USD
-2.26 (-0.67%)
332.99 USD
-0.12 (-0.04%)
We assign a fundamental rating of 6 out of 10 to SHW. SHW was compared to 81 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. SHW is valied quite expensively at the moment, while it does show a decent growth rate.
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.
SHW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of SHW (9.81%) is better than 96.30% of its industry peers.
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.
Looking at the Return On Invested Capital, with a value of 13.81%, SHW belongs to the top of the industry, outperforming 93.83% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SHW is significantly above the industry average of 6.15%.
| 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
Looking at the Profit Margin, with a value of 11.05%, SHW belongs to the top of the industry, outperforming 88.89% of the companies in the same industry.
SHW's Profit Margin has improved in the last couple of years.
SHW has a better Operating Margin (15.81%) than 79.01% of its industry peers.
SHW's Operating Margin has improved in the last couple of years.
The Gross Margin of SHW (48.88%) is better than 93.83% of its industry peers.
In the last couple of years the Gross Margin of SHW has grown nicely.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), SHW is creating value.
The number of shares outstanding for SHW has been reduced compared to 1 year ago.
The number of shares outstanding for SHW has been reduced compared to 5 years ago.
The debt/assets ratio for SHW has been reduced compared to a year ago.
2.2 Solvency
SHW has an Altman-Z score of 4.03. This indicates that SHW is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 4.03, SHW belongs to the best of the industry, outperforming 88.89% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 4.75, SHW belongs to the top of the industry, outperforming 82.72% of the companies in the same industry.
SHW has a Debt/Equity ratio of 2.52. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of SHW (2.52) is worse than 82.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.52 | ||
| Debt/FCF | 4.75 | ||
| Altman-Z | 4.03 |
ROIC/WACC1.62
WACC8.51%
2.3 Liquidity
SHW has a Current 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 Current ratio, with a value of 0.82, SHW is doing worse than 93.83% 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.
SHW's Quick ratio of 0.52 is on the low side compared to the rest of the industry. SHW is outperformed by 92.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.35% over the past year.
SHW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.02% yearly.
Looking at the last year, SHW shows a small growth in Revenue. The Revenue has grown by 0.96% in the last year.
The Revenue has been growing slightly by 5.23% on average over the past years.
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
The Earnings Per Share is expected to grow by 8.04% on average over the next years. This is quite good.
SHW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.89% yearly.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
Based on the Price/Earnings ratio of 29.45, the valuation of SHW can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of SHW is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 26.46. SHW is around the same levels.
The Price/Forward Earnings ratio is 26.21, which means the current valuation is very expensive for SHW.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SHW is on the same level as its industry peers.
SHW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 36.10, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.45 | ||
| Fwd PE | 26.21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHW is valued a bit more expensive than the industry average as 79.01% 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 Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.03 | ||
| EV/EBITDA | 21.23 |
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)20.4
PEG (5Y)2.94
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.
SHW's Dividend Yield is slightly below the industry average, which is at 3.97.
With a Dividend Yield of 0.94, SHW pays less dividend than the S&P500 average, which is at 2.32.
| 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 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
30.09% 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.
DP30.09%
EPS Next 2Y5.92%
EPS Next 3Y8.11%
333.11
-2.26 (-0.67%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners84.11%
Inst Owner Change-1.03%
Ins Owners0.06%
Ins Owner Change-3.86%
Market Cap82.57B
Revenue(TTM)23.28B
Net Income(TTM)2.57B
Analysts73.75
Price Target393.87 (18.24%)
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 | 29.45 | ||
| Fwd PE | 26.21 | ||
| P/S | 3.55 | ||
| P/FCF | 34.03 | ||
| P/OCF | 25.07 | ||
| P/B | 18.66 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.23 |
EPS(TTM)11.31
EY3.4%
EPS(NY)12.71
Fwd EY3.82%
FCF(TTM)9.79
FCFY2.94%
OCF(TTM)13.29
OCFY3.99%
SpS93.89
BVpS17.85
TBVpS-27.57
PEG (NY)20.4
PEG (5Y)2.94
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 | 4.03 |
F-Score5
WACC8.51%
ROIC/WACC1.62
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 29.45 and the Price/Book (PB) ratio is 18.66.
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.