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 an 11% 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
(4) currency
fluctuations.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Ind Ave 1.5 14 37 NA
Debt/ EPS Down Net Value Line
Equity ROE Since 2004 Margin Rating
Ind Ave 27 31 NA 8 NA.
Chart
Note:
SHW stock made great progress off its March 2009 low, quickly surpassing the downtrend
off its July 2007 high (straight red line) and the November 2008 trading high
(green line). Long term, the stock 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 day moving
average. The Dividend Growth Portfolio
owns a 50% in SHW, having Sold Half in mid-2013. The upper boundary of its Buy Value Range is
$91; the lower boundary of its Sell Half Range is $185.
No comments:
Post a Comment