Sherwin-Williams Co

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SHW : NYSE : Basic Materials
$331.18 up 3.45 | 1.05%
Today's Range: 328.02 - 331.43
Avg. Daily Volume: 656800.0
04/25/17 - 4:02 PM ET

Financial Analysis


SHERWIN-WILLIAMS CO's gross profit margin for the first quarter of its fiscal year 2017 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 0.81 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 106.36% 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 Q1 FY17 Q1 FY16
Net Sales ($mil)2761.392574.02
EBITDA ($mil)377.71339.07
EBIT ($mil)326.93290.39
Net Income ($mil)239.15164.88


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)1017.8170.55
Total Assets ($mil)6988.96038.31
Total Debt ($mil)1954.212039.63
Equity ($mil)2065.351000.82


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin50.4850.91
EBITDA Margin13.6713.17
Operating Margin11.8411.28
Sales Turnover1.721.9
Return on Assets17.2618.0
Return on Equity58.43108.64
Debt Q1 FY17 Q1 FY16
Current Ratio1.321.28
Debt/Capital0.490.67
Interest Expense25.725.73
Interest Coverage12.7211.29


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)93.0192.5
Div / share0.850.84
EPS2.531.75
Book value / share22.2110.82
Institutional Own % n/a n/a
Avg Daily Volume659071.0987725.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 40.70 for the Chemicals industry and a value on par with the S&P 500 average of 24.92. For additional comparison, its price-to-book ratio of 14.59 indicates a significant premium versus the S&P 500 average of 2.99 and a significant premium versus the industry average of 6.15. 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 25.41 Peers 40.70   SHW NA Peers 15.31

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.

 

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

Ratio not available.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SHW 21.60 Peers 20.77   SHW 1.73 Peers 1.31

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.

 

Premium. 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 premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SHW 14.59 Peers 6.15   SHW 10.58 Peers 4.17

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 2.50 Peers 2.39   SHW 5.05 Peers -0.96

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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