The Sherwin-Williams Company
The Sherwin-Williams Company Fundamental Analysis
The Sherwin-Williams Company (SHW) shows moderate financial fundamentals with a PE ratio of 34.97, profit margin of 10.90%, and ROE of 58.53%. The company generates $23.7B in annual revenue with weak year-over-year growth of 0.20%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 47.7/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze SHW's fundamental strength across five key dimensions:
Efficiency Score
WeakSHW struggles to generate sufficient returns from assets.
Valuation Score
WeakSHW trades at a premium to fair value.
Growth Score
ModerateSHW shows steady but slowing expansion.
Financial Health Score
WeakSHW carries high financial risk with limited liquidity.
Profitability Score
ModerateSHW maintains healthy but balanced margins.
Key Financial Metrics
Is SHW Expensive or Cheap?
P/E Ratio
SHW trades at 34.97 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, SHW's PEG of 181.13 indicates potential overvaluation.
Price to Book
The market values The Sherwin-Williams Company at 19.53 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 17.31 times EBITDA. This signals the market has high growth expectations.
How Well Does SHW Make Money?
Net Profit Margin
For every $100 in sales, The Sherwin-Williams Company keeps $10.90 as profit after all expenses.
Operating Margin
Core operations generate 16.14 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $58.53 in profit for every $100 of shareholder equity.
ROA
The Sherwin-Williams Company generates $9.92 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Sherwin-Williams Company produces operating cash flow of $3.47B, showing steady but balanced cash generation.
Free Cash Flow
The Sherwin-Williams Company generates strong free cash flow of $2.67B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $10.77 in free cash annually.
FCF Yield
SHW converts 2.93% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
34.97
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
181.13
vs 25 benchmark
P/B Ratio
Price to book value ratio
19.53
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.83
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.16
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.87
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.59
vs 25 benchmark
ROA
Return on assets percentage
0.10
vs 25 benchmark
ROCE
Return on capital employed
0.20
vs 25 benchmark
How SHW Stacks Against Its Sector Peers
| Metric | SHW Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 34.97 | 27.01 | Worse (Expensive) |
| ROE | 58.53% | 949.00% | Weak |
| Net Margin | 10.90% | -16219.00% (disorted) | Strong |
| Debt/Equity | 3.16 | 0.48 | Weak (High Leverage) |
| Current Ratio | 0.87 | 4.42 | Weak Liquidity |
| ROA | 9.92% | -6413.00% (disorted) | Weak |
SHW outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Sherwin-Williams Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
39.86%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
88.56%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
47.23%
Industry Style: Cyclical, Commodity, Value
High Growth