Sherwin Williams Co (SHW) stock analysis

P/E below its 5-year median

Sherwin Williams's P/E of 32.7 is below its own 5-year median of 33.2.

P/E above the industry

Sherwin Williams's P/E of 32.7 is above the Consumer discretionary median of 19.6.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B above the industry

Sherwin Williams's price-to-book of 21.61 is above the Consumer discretionary median of 4.67.

Trading above fair value

The share price of $355.76 is above our fair value estimate of $238.84.

Margin of safety under 20%

The price is 49.0% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 2.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 9.9% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 4.1% over the last twelve months, against a 5-year average of 4.8% a year.

Growing faster than the industry

Revenue grew 7.0% over the last twelve months; the Consumer discretionary median is 2.5%.

Guidance raised

Sherwin Williams raised its Full Year 2026 Diluted net income per share outlook on Jul 28, 2026.

Gross margin slipping

Gross margin was 48.6% over the last twelve months, against 48.9% a year earlier.

Return on equity over 15%

Return on equity was 63.7% over the last twelve months and averaged 66.6% over five years.

Return on invested capital

Needs operating income and invested capital.

Return on equity above the industry

Sherwin Williams's return on equity of 63.7% is above the Consumer discretionary median of 9.9%.

Earnings grew over 5 years

Net income grew 4.8% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 10.7% over the last twelve months, against a 5-year average of 10.3%.

Net margin above the industry

Sherwin Williams's net margin of 10.7% is above the Consumer discretionary median of 6.2%.

High debt

Debt is 297% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 230% five years ago to 297%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 31.2% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets don't cover short-term debts

Current assets are 0.71 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.18; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Sherwin Williams paid dividends worth 0.9% of the share price over the last twelve months.

Yield below Treasuries

The 0.9% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Sherwin Williams yields 0.9%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 29.3% of net income.

Covered by free cash flow

Dividends take 25.5% of free cash flow.