NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, increase in net income, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.1%. Since the same quarter one year prior, revenues rose by 15.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Chemicals industry and the overall market, SHERWIN-WILLIAMS CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 46.7% when compared to the same quarter one year prior, rising from $68.32 million to $100.22 million.
- Powered by its strong earnings growth of 50.79% and other important driving factors, this stock has surged by 56.56% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- SHERWIN-WILLIAMS CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SHERWIN-WILLIAMS CO reported lower earnings of $4.14 versus $4.21 in the prior year. This year, the market expects an improvement in earnings ($6.17 versus $4.14).
The Sherwin-Williams Company engages in the development, manufacture, distribution, and sale of paints, coatings, and related products to professional, industrial, commercial, and retail customers primarily in North and South America, the Caribbean region, Europe, and Asia. The company has a P/E ratio of 29.6, above the average materials & construction industry P/E ratio of 29.4and above the S&P 500 P/E ratio of 17.7. Sherwin-Williams has a market cap of $13.62 billion and is part of the
industry. Shares are up 47.7% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.