Sherwin-Williams Co

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SHW : NYSE : Basic Materials
$271.11 up 1.3 | 0.49%
Today's Range: 267.61 - 271.47
Avg. Daily Volume: 999400.0
12/08/16 - 1:11 PM ET

Financial Analysis


SHERWIN-WILLIAMS CO's gross profit margin for the third 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 0.86 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 63.67% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)3279.463152.29
EBITDA ($mil)641.52629.57
EBIT ($mil)591.76580.93
Net Income ($mil)386.73374.49


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)702.5791.03
Total Assets ($mil)6917.776102.02
Total Debt ($mil)1961.721960.14
Equity ($mil)1597.78976.17


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin51.4151.49
EBITDA Margin19.5619.97
Operating Margin18.0418.43
Sales Turnover1.691.85
Return on Assets16.316.2
Return on Equity70.57101.27
Debt Q3 FY16 Q3 FY15
Current Ratio1.471.27
Debt/Capital0.550.67
Interest Expense44.117.0
Interest Coverage13.4234.18


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)92.9193.1
Div / share0.840.67
EPS4.083.97
Book value / share17.210.49
Institutional Own % n/a n/a
Avg Daily Volume986540.0701332.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 28.69 for the Chemicals industry and a discount compared to the S&P 500 average of 25.37. For additional comparison, its price-to-book ratio of 15.49 indicates a significant premium versus the S&P 500 average of 2.81 and a significant premium versus the industry average of 5.30. The current price-to-sales ratio is above the S&P 500 average, but below the industry average. The valuation analysis reveals that, SHERWIN-WILLIAMS CO seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SHW 22.27 Peers 28.69   SHW 16.24 Peers 14.37

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

SHW is trading at a 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 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 19.50 Peers 20.91   SHW 2.17 Peers 2.23

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 15.49 Peers 5.30   SHW 14.77 Peers -9.77

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 2.12 Peers 2.27   SHW 3.30 Peers -6.01

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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