Sherwin-Williams Co

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SHW : NYSE : Basic Materials
$310.21 -2.4 | -0.78%
Today's Range: 309.625 - 313.36
Avg. Daily Volume: 835500.0
02/27/17 - 3:59 PM ET

Financial Analysis


SHERWIN-WILLIAMS CO's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. SHERWIN-WILLIAMS CO has weak liquidity. Currently, the Quick Ratio is 0.75 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 116.43% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)2782.592604.6
EBITDA ($mil)401.89382.39
EBIT ($mil)352.67330.77
Net Income ($mil)203.03198.02


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)889.79205.74
Total Assets ($mil)6752.525791.86
Total Debt ($mil)1952.541962.81
Equity ($mil)1878.44867.91


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin51.6752.75
EBITDA Margin14.4414.68
Operating Margin12.6712.7
Sales Turnover1.761.96
Return on Assets16.7718.19
Return on Equity60.3121.42
Debt Q4 FY16 Q4 FY15
Current Ratio1.281.24
Debt/Capital0.510.69
Interest Expense43.3819.56
Interest Coverage8.1316.91


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)93.0192.25
Div / share0.840.67
EPS2.152.11
Book value / share20.29.41
Institutional Own % n/a n/a
Avg Daily Volume827861.0957612.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 38.55 for the Chemicals industry and a value on par with the S&P 500 average of 26.53. For additional comparison, its price-to-book ratio of 15.36 indicates a significant premium versus the S&P 500 average of 2.96 and a significant premium versus the industry average of 6.19. The current price-to-sales ratio is above both the S&P 500 average and the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SHW 25.91 Peers 38.55   SHW 22.05 Peers 16.01

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

SHW is trading at a significant discount to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

SHW is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SHW 20.58 Peers 21.12   SHW 1.77 Peers 1.78

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

SHW is trading at a valuation on par with its peers.

 

Average. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

SHW trades at a valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SHW 15.36 Peers 6.19   SHW 7.25 Peers -14.38

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

SHW is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

SHW is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SHW 2.43 Peers 2.37   SHW 4.55 Peers -2.81

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

SHW is trading at a valuation on par with its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

SHW has a sales growth rate that significantly exceeds its peers.

 

 

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