Sherwin Williams
Co. is one of the largest producers of paints, varnishes and application
equipment, much of its sold through 3500+ retail paint and wall covering
stores; in addition, it produces auto coatings which are sold through auto
coatings outlets. The company has grown
profits and dividends at a 10% pace over the last 10 years earning a 20%+
return on equity. The company’s revenues
and profits are negatively impacted by weakness in the construction and housing
markets. However, it should still grow
at an above average pace as a result of:
(1) improving US
and international sales in autos, OEM product finishes and protective and
marine coatings,
(2) aggressive
expansion overseas,
(3) a major
re-organization that will reduce costs, improve productivity and generate cash
flow that will be used to reduce debt and buy back stock.
(4)
acquisitions.
Negatives
(1) its retail
paint stores are being impacted by US
economic weakness,
(2) a poor
pricing environment in the consumer segment,
(3) rising
material costs.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2003
Debt/ EPS Down Net Value Line
Equity ROE Since 2003 Margin Rating
Chart
Note:
SHW stock made great progress off its March
2009 low, quickly surpassing the downtrend off the July 2007 high (straight red
line) and the November 2008 trading high (green line). Long term , it is in an uptrend (blue lines).
Intermediate term, it is in an uptrend (purple lines. Short term, it is in an uptrend (brown
line). The wiggly red line is the 50
moving average. The dividend Growth
Portfolio owns a 50% position in SHW , having
Sold Half when the stock entered that Range.
The upper boundary of its Buy Value
Range Sell Half
Range
5/13
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