NYSE:SHW

Stock Analysis Report

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Executive Summary

The Sherwin-Williams Company develops, manufactures, distributes, and sells paints, coatings, and related products to professional, industrial, commercial, and retail customers.


Snowflake Analysis

Solid track record average dividend payer.


Similar Companies

Share Price & News

How has Sherwin-Williams's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SHW's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.9%

SHW

4.5%

US Chemicals

4.3%

US Market


1 Year Return

27.4%

SHW

-3.3%

US Chemicals

7.4%

US Market

Return vs Industry: SHW exceeded the US Chemicals industry which returned -3.3% over the past year.

Return vs Market: SHW exceeded the US Market which returned 7.4% over the past year.


Shareholder returns

SHWIndustryMarket
7 Day1.9%4.5%4.3%
30 Day0.6%-3.9%0.5%
90 Day20.6%26.2%23.0%
1 Year28.6%27.4%-1.1%-3.3%9.7%7.4%
3 Year71.3%66.7%16.5%-5.3%38.3%29.2%
5 Year117.7%107.1%35.6%5.2%66.0%47.6%

Price Volatility Vs. Market

How volatile is Sherwin-Williams's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Sherwin-Williams undervalued compared to its fair value and its price relative to the market?

33.33x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SHW ($588.74) is trading above our estimate of fair value ($460.14)

Significantly Below Fair Value: SHW is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SHW is poor value based on its PE Ratio (33.3x) compared to the Chemicals industry average (21x).

PE vs Market: SHW is poor value based on its PE Ratio (33.3x) compared to the US market (16.5x).


Price to Earnings Growth Ratio

PEG Ratio: SHW is poor value based on its PEG Ratio (3.3x)


Price to Book Ratio

PB vs Industry: SHW is overvalued based on its PB Ratio (16.3x) compared to the US Chemicals industry average (2x).


Next Steps

Future Growth

How is Sherwin-Williams forecast to perform in the next 1 to 3 years based on estimates from 24 analysts?

10.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SHW's forecast earnings growth (10% per year) is above the savings rate (2.2%).

Earnings vs Market: SHW's earnings (10% per year) are forecast to grow slower than the US market (22.8% per year).

High Growth Earnings: SHW's earnings are forecast to grow, but not significantly.

Revenue vs Market: SHW's revenue (3.6% per year) is forecast to grow slower than the US market (9.3% per year).

High Growth Revenue: SHW's revenue (3.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SHW's Return on Equity is forecast to be very high in 3 years time (47.2%).


Next Steps

Past Performance

How has Sherwin-Williams performed over the past 5 years?

9.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SHW has high quality earnings.

Growing Profit Margin: SHW's current net profit margins (9%) are higher than last year (6.3%).


Past Earnings Growth Analysis

Earnings Trend: SHW's earnings have grown by 9.6% per year over the past 5 years.

Accelerating Growth: SHW's earnings growth over the past year (46.5%) exceeds its 5-year average (9.6% per year).

Earnings vs Industry: SHW earnings growth over the past year (46.5%) exceeded the Chemicals industry -11.3%.


Return on Equity

High ROE: Whilst SHW's Return on Equity (49.19%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Sherwin-Williams's financial position?


Financial Position Analysis

Short Term Liabilities: SHW's short term assets ($4.9B) do not cover its short term liabilities ($5.2B).

Long Term Liabilities: SHW's short term assets ($4.9B) do not cover its long term liabilities ($12.1B).


Debt to Equity History and Analysis

Debt Level: SHW's debt to equity ratio (297%) is considered high.

Reducing Debt: SHW's debt to equity ratio has reduced from 531.2% to 297% over the past 5 years.

Debt Coverage: SHW's debt is well covered by operating cash flow (24.7%).

Interest Coverage: SHW's interest payments on its debt are well covered by EBIT (8.2x coverage).


Balance Sheet


Next Steps

Dividend

What is Sherwin-Williams's current dividend yield, its reliability and sustainability?

0.91%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SHW's dividend (0.91%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.66%).

High Dividend: SHW's dividend (0.91%) is low compared to the top 25% of dividend payers in the US market (4.49%).


Stability and Growth of Payments

Stable Dividend: SHW's dividends per share have been stable in the past 10 years.

Growing Dividend: SHW's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (26.8%), SHW's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SHW's dividends in 3 years are forecast to be well covered by earnings (22.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average management tenure


CEO

John Morikis (57yo)

4.5yrs

Tenure

US$14,854,731

Compensation

Mr. John G. Morikis has been the President of The Valspar Corporation since June 1, 2017. Mr. Morikis has been the Chief Executive Officer of The Sherwin-Williams Company since January 1, 2016 and as its C ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD14.85M) is about average for companies of similar size in the US market ($USD11.50M).

Compensation vs Earnings: John's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
John Morikis
Chairman & CEO4.5yrsUS$14.85m0.15% $75.2m
David Sewell
President & COO1.33yrsUS$4.44m0.0074% $3.6m
Allen Mistysyn
Senior VP of Finance & CFO3.5yrsUS$4.18m0.020% $9.7m
Peter Ippolito
President of The Americas Group2.5yrsUS$3.62m0.016% $7.8m
Aaron Erter
President of Performance Coatings Group3.08yrsUS$3.62m0.0033% $1.6m
James Jaye
Senior Vice President of Investor Relations & Corporate Communications2.75yrsno datano data
Mary Garceau
Senior VP2.92yrsno data0.0021% $1.0m
Karl Schmitt
Senior Vice President of Marketingno datano datano data
Thomas Gilligan
Senior Vice President of Human Resources4.5yrsno data0.0090% $4.4m
Thomas Hablitzel
Senior Vice President of Enterprise Strategic Accountsno datano datano data

3.0yrs

Average Tenure

53.5yo

Average Age

Experienced Management: SHW's management team is considered experienced (3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Morikis
Chairman & CEO4.5yrsUS$14.85m0.15% $75.2m
Christine Poon
Independent Director6.25yrsUS$324.41k0.0030% $1.4m
Susan Kropf
Independent Director17.42yrsUS$317.84k0.0086% $4.2m
Steven Wunning
Independent Lead Director1.08yrsUS$342.36k0.0022% $1.1m
Michael Thaman
Independent Director3.25yrsUS$304.42k0.00083% $403.7k
Jeffrey Fettig
Independent Director1.25yrsUS$262.84k0.00061% $296.7k
Kerrii Anderson
Independent Director1.25yrsUS$265.83k0.00012% $58.4k
Richard Kramer
Independent Director8.42yrsUS$304.42k0.0060% $2.9m
Arthur Anton
Independent Director14.25yrsUS$329.42k0.016% $7.6m
Matthew Thornton
Independent Director6yrsUS$308.69k0.0029% $1.4m

4.8yrs

Average Tenure

63yo

Average Age

Experienced Board: SHW's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SHW insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Sherwin-Williams Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Sherwin-Williams Company
  • Ticker: SHW
  • Exchange: NYSE
  • Founded: 1866
  • Industry: Specialty Chemicals
  • Sector: Materials
  • Market Cap: US$48.638b
  • Shares outstanding: 82.61m
  • Website: https://www.sherwin-williams.com

Number of Employees


Location

  • The Sherwin-Williams Company
  • 101 West Prospect Avenue
  • Cleveland
  • Ohio
  • 44115-1075
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SHWNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
SJ3DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
SHW *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
0L5VLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
SJ3ETLX (Eurotlx)YesCommon StockITEURJan 1968
SHWWWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
S1HW34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 10 REPR 1 COMBRBRLJan 2020

Biography

The Sherwin-Williams Company develops, manufactures, distributes, and sells paints, coatings, and related products to professional, industrial, commercial, and retail customers. It operates in three segments: The Americas Group, Consumer Brands Group, and Performance Coatings Group. The Americas Group segment offers architectural paints and coatings, and protective and marine products, as well as OEM product finishes and related products for architectural and industrial paint contractors, and do-it-yourself homeowners. The Consumer Brands Group segment provides branded and private-label architectural paints, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks, and adhesives to retailers and distributors. The Performance Coatings Group segment develops and sells industrial coatings for wood finishing and general industrial applications, automotive refinish products, protective and marine coatings, coil coatings, packaging coatings, and performance-based resins and colorants. It serves retailers, dealers, jobbers, licensees, and other third-party distributors through its branches and direct sales staff, as well as through outside sales representatives. The company has operations primarily in North and South America, the Caribbean, Europe, Asia, and Australia. As of March 3, 2020, it operated approximately 4,900 company-operated stores and facilities. The company was founded in 1866 and is headquartered in Cleveland, Ohio. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/07 23:50
End of Day Share Price2020/07/07 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.