Editor's Note: 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.
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, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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 27.2% when compared to the same quarter one year prior, rising from $179.12 million to $227.81 million.
- Net operating cash flow has increased to $356.95 million or 36.58% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.32%.
- 46.40% is the gross profit margin for SHERWIN-WILLIAMS CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.90% trails the industry average.
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 29.7, equal to the average materials & construction industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Sherwin-Williams has a market cap of $15.2 billion and is part of the
industry. Shares are up 68.1% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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