Sherwin-Williams Stock Analysis, Valuation (NYSE:SHW)

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$400.88 $2.46 (0.62%) SHW stock closing price Apr 18, 2018 (Closing)
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Sherwin-Williams
Updated on : Apr 18, 2018
previous close
SHW 400.9 (0%)
S&P 500 2708.6 (0%)
Closing Price On: Apr 18, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Paints and Allied products
Sector :
Construction
5 Quarter Revenue
Revenue Growth
2017-Q4
$billion
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
11.8%
Sector Average:
7.5%
5 Quarter Net Profit
Net Margins
2017-Q4
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
10.52B
Debt/Equity Ratio:
 2.85
Compared to the industry
Cash Flow
Operating cash flow:
$625.1M
Net Income:
$897.4M
Dividend Yield
SHW dividend yield:
0.85%
PROS      CONS
Recent Growth
Operating Margins
Net Margins
ROIC
ROE
FCF Margin
High Debt Burden
Cash Flow
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
SHW PS :
2.5
Industry PS :
0.9
Sector:   Construction.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
11.1%
Return on Equity:
69.4%
Free Cash Flow Margin:
13.7%
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Sherwin-Williams Stock Analysis

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View the Sherwin-Williams stock analysis video on Amigobulls. Our SHW analysis video highlights revenue and profit trends along with other important metrics such as valuation to find what makes the stock attractive.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Sherwin-Williams Co Stock Rating 3/5

We at Amigobulls use various financial measures including profit margins, revenue growth and dividends for SHW stock analysis. Sherwin-Williams valuation forms a crucial part of our stock analysis. Based on a company's historical fundamentals we arrive at Sherwin-Williams stock rating which is indicative of the company's financial performance.

Should you buy SHW stock?

  • Sherwin-Williams sales grew by 43% year on year in 2017 Q4.
  • The TTM operating margin was good at 11.8% for Sherwin-Williams.
  • Net margins came in at average 11.8% for Sherwin-Williams over the last twelve months.
  • Sherwin-Williams generates a high return on invested capital of 11.1%.
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for Sherwin-Williams at 69.4%.
  • Sherwin-Williams has a healthy FCF (Free Cash Flow) margin of 13.7%.

Should you sell SHW stock?

  • With a debt/equity ratio of  2.85, Sherwin-Williams is highly leveraged in comparison to Construction peers.
  • Cash flow from operations is low at 0.7 times the net income.
  • Trading at a PE ratio of 27.7, SHW stock is overvalued in comparison to industry average multiple of 21.
  • The company is trading at a price to sales multiple of 2.5, which is overvalued in comparison to the Paints and Allied products industry average multiple of 0.9.

Comments on this video and Sherwin-Williams stock

Investors can use Amigobulls Sherwin-Williams stock analysis as a tool to arrive at accurate conclusions regarding financial health of the company and its valuation. Company's fundamentals remain one of the key driver of SHW stock and helps investors in making good buy and sell decision.

Sherwin-Williams revenue growth and profit or net income are the main underlying forces which could detremine the direction of the share price. Technical analysis comes in handy to check whether the market sentiment is in line with the fundamental picture of the company.