Fact based stock research
Sherwin-Williams (NYSE:SHW)
US8243481061
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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Sherwin-Williams stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 1 (worse than 99% compared with investment alternatives), Sherwin-Williams (Specialty Chemicals, USA) shares have lower financial characteristics compared with similar stocks. Shares of Sherwin-Williams are low in value (priced high) with a consolidated Value Rank of 12 (worse than 88% of alternatives), show below-average growth (Growth Rank of 43), and are riskily financed (Safety Rank of 11), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 1, is a sell recommendation based on Sherwin-Williams's financial characteristics. As the company Sherwin-Williams's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 12), low growth (Obermatt Growth Rank of 43), and risky financing practices (Obermatt Safety Rank of 11), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | USA |
| Industry | Specialty Chemicals |
| Index | S&P 500 |
| Size class | XX-Large |
19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Sherwin-Williams
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 18 |
|
4 |
|
1 |
|
12 |
|
| GROWTH | ||||||||
| GROWTH | 24 |
|
44 |
|
54 |
|
43 |
|
| SAFETY | ||||||||
| SAFETY | 6 |
|
8 |
|
8 |
|
11 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
44 |
|
88 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
12 |
|
16 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 1 (worse than 99% compared with investment alternatives), Sherwin-Williams (Specialty Chemicals, USA) shares have lower financial characteristics compared with similar stocks. Shares of Sherwin-Williams are low in value (priced high) with a consolidated Value Rank of 12 (worse than 88% of alternatives), show below-average growth (Growth Rank of 43), and are riskily financed (Safety Rank of 11), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 1, is a sell recommendation based on Sherwin-Williams's financial characteristics. As the company Sherwin-Williams's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 12), low growth (Obermatt Growth Rank of 43), and risky financing practices (Obermatt Safety Rank of 11), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 18 |
|
4 |
|
1 |
|
12 |
|
| GROWTH | ||||||||
| GROWTH | 24 |
|
44 |
|
54 |
|
43 |
|
| SAFETY | ||||||||
| SAFETY | 6 |
|
8 |
|
8 |
|
11 |
|
| COMBINED | ||||||||
| COMBINED | 6 |
|
4 |
|
1 |
|
1 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 12 (worse than 88% compared with alternatives), Sherwin-Williams shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Sherwin-Williams. Price-to-Sales is 13 which means that the stock price compared with what market professionals expect for future profits is higher than 87% of comparable companies, indicating a low value concerning Sherwin-Williams's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 7, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Sherwin-Williams. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 15 and Dividend Yield, which is lower than 58% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 12, is a sell recommendation based on Sherwin-Williams's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Sherwin-Williams? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Sherwin-Williams? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Sherwin-Williams may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 21 |
|
15 |
|
9 |
|
13 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 29 |
|
10 |
|
5 |
|
15 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 1 |
|
1 |
|
3 |
|
7 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 55 |
|
28 |
|
18 |
|
42 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 18 |
|
4 |
|
1 |
|
12 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% compared with alternatives), Sherwin-Williams shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Sherwin-Williams. Profit Growth has a rank of 57, which means that currently professionals expect the company to grow its profits more than 57% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 73 (above 73% of alternative investments). But Sales Growth has a below the median rank of 42, which means that, currently, professionals expect the company to grow less than 58% of its competitors, and Capital Growth also has a lower rank of 7. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Sherwin-Williams. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 31 |
|
76 |
|
38 |
|
42 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 62 |
|
8 |
|
81 |
|
57 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
34 |
|
16 |
|
7 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 51 |
|
66 |
|
82 |
|
73 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 24 |
|
44 |
|
54 |
|
43 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 11 (better than 11% compared with alternatives), the company Sherwin-Williams has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Sherwin-Williams is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Sherwin-Williams. Liquidity is at 75, meaning the company generates more profit to service its debt than 75% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 9, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 91% of its competitors. Leverage is also high at a rank of 18, which means that the company has an above-average debt-to-equity ratio. It has more debt than 82% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 11 (worse than 89% compared with alternatives), Sherwin-Williams has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 39 |
|
13 |
|
9 |
|
18 |
|
| REFINANCING | ||||||||
| REFINANCING | 16 |
|
6 |
|
8 |
|
9 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 24 |
|
68 |
|
59 |
|
75 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 6 |
|
8 |
|
8 |
|
11 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
19 |
|
45 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
49 |
|
66 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
40 |
|
77 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
73 |
|
87 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
44 |
|
88 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Sherwin-Williams from December 19, 2024.
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