Sherwin-Williams Co

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SHW : NYSE : Basic Materials
$333.77 up 2.0 | 0.62%
Today's Range: 331.25 - 334.28
Avg. Daily Volume: 682700.0
08/16/17 - 11:52 AM ET

Financial Analysis


SHERWIN-WILLIAMS CO's gross profit margin for the second quarter of its fiscal year 2017 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. SHERWIN-WILLIAMS CO has weak liquidity. Currently, the Quick Ratio is 0.62 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 91.81% 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 Q2 FY17 Q2 FY16
Net Sales ($mil)3735.823219.53
EBITDA ($mil)704.83635.83
EBIT ($mil)625.55586.42
Net Income ($mil)319.11378.06


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)210.05402.66
Total Assets ($mil)20717.46665.68
Total Debt ($mil)11504.291970.6
Equity ($mil)2391.261246.63


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin48.8252.17
EBITDA Margin18.8619.74
Operating Margin16.7418.21
Sales Turnover0.611.73
Return on Assets5.5416.73
Return on Equity49.7489.47
Debt Q2 FY17 Q2 FY16
Current Ratio1.171.33
Debt/Capital0.830.61
Interest Expense56.7340.88
Interest Coverage11.0314.35


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)93.4192.22
Div / share0.850.84
EPS3.83.99
Book value / share25.613.52
Institutional Own % n/a n/a
Avg Daily Volume667583.0517510.0

Valuation


BUY. This stock's P/E ratio indicates a significant discount compared to an average of 46.19 for the Chemicals industry and a premium compared to the S&P 500 average of 24.31. For additional comparison, its price-to-book ratio of 12.97 indicates a significant premium versus the S&P 500 average of 3.03 and a significant premium versus the industry average of 5.00. 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 26.44 Peers 46.19   SHW 22.41 Peers 23.93

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.

 

Average. 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 valuation on par 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 18.45 Peers 20.06   SHW 1.04 Peers 1.40

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

SHW is trading at a premium to its peers.

 

Discount. 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 significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SHW 12.97 Peers 5.00   SHW 6.26 Peers 14.02

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.

 

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

However, SHW is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SHW 2.47 Peers 2.37   SHW 8.73 Peers 7.75

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 exceeds its peers.

 

 

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