NYSE:SHW

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Limited growth with questionable track record.


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


Market Performance


7 Day Return

0.1%

SHW

2.0%

US Chemicals

1.0%

US Market


1 Year Return

36.7%

SHW

-5.9%

US Chemicals

6.7%

US Market

Return vs Industry: SHW exceeded the US Chemicals industry which returned -5.9% over the past year.

Return vs Market: SHW exceeded the US Market which returned 6.7% over the past year.


Share holder returns

SHWIndustryMarket
7 Day0.1%2.0%1.0%
30 Day1.6%-2.8%-1.8%
90 Day17.6%-2.6%-1.8%
1 Year38.0%36.7%8.1%-5.9%9.1%6.7%
3 Year110.0%104.0%43.4%17.3%46.1%36.6%
5 Year163.1%150.2%46.1%14.8%66.9%48.6%

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 based on future cash flows and its price relative to the stock market?

43.37x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Undervalued: SHW ($550.01) is trading above our estimate of fair value ($408.6)

Significantly Undervalued: SHW is trading above our estimate of fair value.


Price Based on Earnings

PE vs Industry: SHW is poor value based on its PE Ratio (43.4x) compared to the Chemicals industry average (19.4x).

PE vs Market: SHW is poor value based on its PE Ratio (43.4x) compared to the US market (17.5x).


Price Based on Expected Growth

Low PEG Ratio: SHW is poor value based on its PEG Ratio (3.6x)


Price Based on Value of Assets

PB vs Industry: SHW is overvalued based on its PB Ratio (13.5x) compared to the US Chemicals industry average (2x).


Next Steps

Future Growth

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

12.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: SHW's forecast earnings growth (12% per year) is above the savings rate (2.7%).

Earnings vs Market: SHW's earnings (12% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: SHW's revenue (4.3% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: SHW's revenue (4.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: SHW's Return on Equity is forecast to be very high in 3 years time (44%).


Next Steps

Past Performance

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

12.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SHW's earnings have grown by 12% per year over the past 5 years.

Accelerating Growth: SHW's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SHW had negative earnings growth (-35.8%) over the past year, making it difficult to compare to the Chemicals industry average (-2%).


Return on Equity

High ROE: Whilst SHW's Return on Equity (31.25%) is high, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: SHW has a higher Return on Assets than the Chemicals industry average last year.


Return on Capital Employed

ROCE Improving: SHW's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Sherwin-Williams's financial position?


Financial Position Analysis

Short Term Liabilities: SHW's short term assets ($5.1B) do not cover its short term liabilities ($6.3B)

Long Term Liabilities: SHW's short term assets (5.1B) do not cover its long term liabilities (11.1B)


Debt to Equity History and Analysis

Debt Level: SHW's debt to equity ratio (252.3%) is considered high

Reducing Debt: SHW's debt to equity ratio has increased from 110.9% to 252.3% over the past 5 years.

Debt Coverage: SHW's debt is well covered by operating cash flow (22.4%).

Interest Coverage: SHW's interest payments on its debt are well covered by EBIT (5.8x coverage).


Balance Sheet

Inventory Level: SHW has a high level of physical assets or inventory.

Debt Coverage by Assets: SHW's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

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

0.91%

Expected Dividend Yield


Dividend Yield vs Market

company0.8%marketbottom25%1.5%markettop25%3.8%industryaverage2.1%forecastin3Years0.9%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: SHW's dividend (0.82%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: SHW's dividend (0.82%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: SHW is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: SHW is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: SHW is not paying a notable dividend for .


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SHW's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Sherwin-Williams's salary, the management and board of directors tenure and is there insider trading?

2.5yrs

Average management tenure


CEO

John Morikis (56yo)

3.8yrs

Tenure

US$13,213,749

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 ($USD13.21M) is about average for companies of similar size in the US market ($USD11.20M).

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


Management Age and Tenure

2.5yrs

Average Tenure

52.5yo

Average Age

Experienced Management: SHW's management team is considered experienced (2.5 years average tenure).


Board Age and Tenure

5.4yrs

Average Tenure

62yo

Average Age

Experienced Board: SHW's board of directors are considered experienced (5.4 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$261,30705 Aug 19
David Hodnik
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares501
Max PriceUS$521.57
SellUS$631,56502 Aug 19
Peter Ippolito
EntityIndividual
Role
Unit President
President of The Americas Group
Shares1,231
Max PriceUS$513.05
SellUS$795,57026 Jul 19
David Sewell
EntityIndividual
Role
President
President & COO
Shares1,609
Max PriceUS$494.45
SellUS$478,11017 Jun 19
Susan Kropf
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$478.11
BuyUS$216,03523 May 19
Jeffrey Fettig
EntityIndividual
Shares500
Max PriceUS$432.07
SellUS$3,006,88315 May 19
Robert Lynch
EntityIndividual
Shares6,984
Max PriceUS$433.53
SellUS$863,26225 Feb 19
Joel Baxter
EntityIndividual
Shares1,960
Max PriceUS$440.44
SellUS$121,34122 Feb 19
Jane Cronin
EntityIndividual
Shares275
Max PriceUS$441.24
BuyUS$253,12531 Oct 18
John Stropki
EntityIndividual
Shares675
Max PriceUS$375.00

Ownership Breakdown


Management Team

  • John Morikis (56yo)

    Chairman & CEO

    • Tenure: 3.8yrs
    • Compensation: US$13.21m
  • Jim Jaye

    Senior Vice President of Investor Relations & Corporate Communications

    • Tenure: 0yrs
  • Mary Garceau (46yo)

    Senior VP

    • Tenure: 0yrs
  • Al Mistysyn (50yo)

    Senior VP of Finance & CFO

    • Tenure: 2.8yrs
    • Compensation: US$3.37m
  • Stephen Perisutti (56yo)

    VP, Deputy General Counsel & Assistant Secretary

    • Tenure: 0yrs
  • David Sewell (50yo)

    President & COO

    • Tenure: 0.6yrs
    • Compensation: US$3.04m
  • Pete Ippolito (55yo)

    President of The Americas Group

    • Tenure: 1.8yrs
    • Compensation: US$2.74m
  • Aaron Erter (45yo)

    President of Performance Coatings Group

    • Tenure: 2.3yrs
    • Compensation: US$3.13m
  • Thomas Gilligan (58yo)

    Senior Vice President of Human Resources

    • Tenure: 3.8yrs
  • Karl Schmitt

    Senior Vice President of Marketing

    • Tenure: 0yrs

Board Members

  • David Hodnik (71yo)

    Independent Director

    • Tenure: 14.3yrs
    • Compensation: US$260.80k
  • Chris Poon (67yo)

    Independent Director

    • Tenure: 5.5yrs
    • Compensation: US$279.31k
  • Susan Kropf (70yo)

    Independent Director

    • Tenure: 16.7yrs
    • Compensation: US$263.80k
  • Steven Wunning (68yo)

    Lead Director

    • Tenure: 0.3yrs
    • Compensation: US$285.42k
  • Mike Thaman (55yo)

    Independent Director

    • Tenure: 2.5yrs
    • Compensation: US$266.80k
  • John Morikis (56yo)

    Chairman & CEO

    • Tenure: 3.8yrs
    • Compensation: US$13.21m
  • Kerrii Anderson (62yo)

    Independent Director

    • Tenure: 0.5yrs
  • Rich Kramer (55yo)

    Independent Director

    • Tenure: 7.7yrs
    • Compensation: US$260.80k
  • Art Anton (62yo)

    Independent Director

    • Tenure: 13.5yrs
    • Compensation: US$281.80k
  • Matt Thornton (60yo)

    Independent Director

    • Tenure: 5.3yrs
    • Compensation: US$260.80k

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$50.494b
  • Shares outstanding: 91.81m
  • Website: https://www.sherwin-williams.com

Number of Employees


Location

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

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 segmen ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 01:37
End of Day Share Price2019/10/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.

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