sherwin williams
DESCRIPTION
SHW: Financial AnalysisTRANSCRIPT
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SHERWIN-WILLIAMS (SHW)By Nick Elhart
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Introduction
“Since its founding by Henry Sherwin and Edward Williams in 1866, The Sherwin-Williams Company has not only grown to be the largest producer of paints and coatings in the United States, but is among the largest producers in the world.” http://www2.sherwin-williams.com/about/
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About Sherwin-Williams
Founded in 1866 in Cleveland, OH: that’s 143 years in business!
Ranked 316 on the 2008 Fortune 500 list
Have over 3000 paint stores, 100 spray-service stores
30,700 employees
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Mission
“….to lead our industry, to manufacture and market innovative products of superior quality, to operate a safe, clean and friendly workplace, to observe the highest ethical standards in business conduct and to reward our investors.” (http://www2.sherwin-williams.com/about/)
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The Center of Excellence
http://excellence.sherwin.com/
In the 6000 square foot space, seven three-dimensional exhibit areas feature images, text, sound, video and memorabilia.
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U.S. Existing Home SalesSeasonally Adjusted
Source: National Association of Realtors
0
1000
2000
3000
4000
5000
6000
7000
8000
. Jun-01
Dec-01
Jun-02
Dec-02
Jun-03
Dec-03
Jun-04
Dec-04
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Sale
s in
Thousa
nds
of
Unit
s
% C
hange o
ver
Pre
vio
us
Year
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Industry Analysis
Sector: Basic Materials Industry: Chemical: Major-Diversified
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Coatings IndustryTop Manufacturers
Source: Coatings World
1 Sherwin-Williams 2 PPG 3 Valspar 4 Masco 5 ICI 6 DuPont 7 RPM 8 Comex 9 Akzo Nobel 10 Benjamin Moore
1 Akzo Nobel/ICI 2 PPG/SigmaKalon
3 Sherwin-Williams
4 Dupont 5 Valspar 6 RPM 7 BASF 8 Kansai 9 Nippon10 Sika
Worldwide United States
Source: Paint & Coatings Industry
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Coatings IndustryGlobal Demand
7.3 Billion Gallons81 Billion Dollars
United States 26%
Latin America 11%
Europe 32%
Asia Pacific 23%
Canada 4%
Other 4%
Source: U.S. Census Bureau, July 2007/CHEMARK
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2008 Revenues (millions)
PPG: $15,849.00 SHW: $7,979.73 VAL: $3,482.38
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Capital Structure
55%
24%
20%
Capital Structure of Sherwin Williams
Assets LiabilitiesStockholders Equity
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Debt to Asset Ratio
0%
5%
10%
15%
20%
25%
30%
2006 2007 2008
Sherwin Williams
Valspar
PPG
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Gross Profit Margin
0.00%5.00%
10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%50.00%
2006 2007 2008
Sherwin Williams
Valspar
PPG
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Net Profit Margin
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
2006 2007 2008
Sherwin Williams
Valspar
PPG
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Profitability Ratios 2008
ROA ROI ROE0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Sherwin WilliamsValsparPPG
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Liquidity Ratios 2008
0
0.5
1
1.5
2
Quick Ratio Current Ratio
Sherwin-Williams
Valspar
PPG
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Average Collection Period
0
10
20
30
40
50
60
70
80
2006 2007 2008
Sherwin Williams
Valspar
PPG
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Inventory Turnover
0.001.002.003.004.005.006.007.008.009.00
10.00
2008 2007 2006
Sherwin Williams
PPG
Valspar
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Weaknesses
Not very “liquid.” Poor Inventory Turnover ratio Current housing industry
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Strengths
Great debt to asset ratio Great average collection period Superior net and gross profit margins Superior profitability ratios: ROE,
ROI, ROA Established: 143 years-young
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Recommendations
BUY! HOLD IF YOU OWN!
The housing market is expected to bounce back this year.
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Sources
http://excellence.sherwin.com/ http://www.sherwin-williams.com/ National Association of Realtors Coatings World Paint and Coatings Industry Google Finance