Sherwin-Williams Co (SHW, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $323.71, Sherwin-Williams Co has witnessed a daily gain of 0.52%, marked against a three-month change of 17.51%. A thorough analysis, underlined by the GF Score, suggests that Sherwin-Williams Co is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 9/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability and growth rank, and a moderate financial strength and GF Value rank, GuruFocus assigned Sherwin-Williams Co the GF Score of 93 out of 100, which signals the highest outperformance potential.
Understanding Sherwin-Williams Co Business
Sherwin-Williams Co, with a market cap of $82.37 billion and sales of $23.05 billion, is the largest provider of architectural paint in the United States. The company boasts over 5,000 stores and sells premium paint at higher price points than most competitors. Sherwin-Williams Co also sells paint-related products in big-box stores and provides coatings for original equipment manufacturers. With an operating margin of 15.74%, the company demonstrates strong profitability in its operations.
Profitability Rank Breakdown
The Profitability Rank shows Sherwin-Williams Co's impressive standing among its peers in generating profit. The company's Operating Margin has increased to 15.74% in 2023, up from 13.50% in 2019. Additionally, Sherwin-Williams Co's Gross Margin has also seen a consistent rise over the past five years, reaching 46.67% in 2023. These trends underscore the company's growing proficiency in transforming revenue into profit. The Piotroski F-Score confirms Sherwin-Williams Co's solid financial situation, while its strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Sherwin-Williams Co demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 10.3%, which outperforms better than 52.62% of companies in the Chemicals industry. Moreover, Sherwin-Williams Co has seen a robust increase in its EBITDA over the past few years, with a three-year growth rate of 8.8 and a five-year rate of 12.6. This trend accentuates the company's continued capability to drive growth.
Next Steps
Considering Sherwin-Williams Co's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking to capitalize on this momentum can explore more companies with strong GF Scores using the GF Score Screen. Sherwin-Williams Co's robust financial health and strategic market position make it a compelling choice for value investors looking for sustainable growth and profitability.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
