The Company engaged in the manufacturing, distributing and selling of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America.
BATS data provided in real-time. NYSE, NASDAQ and AMEX data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates and Analyst Ratings provided by Zacks.
SEC Filings and Insider Transactions provided by Edgar Online.
Powered and implemented by Interactive Data Managed Solutions. Terms & Conditions
RSS Headlines
Fool UK
Recs
Analyst: Alex Pape
Date: 3/29/2010
Company: The Sherwin-Williams Company (NYSE: SHW)
Market Cap: 7.3b
Price: $67.01
1) A brief overview of the company:
The Sherwin-Williams Company develops, manufactures, distributes, and sells paint, coatings, and related products. Its customers are concentrated in North and South America, though the company also has operations in the Caribbean, Europe, and Asia. The business is structured into three segments:
Sherwin-Williams Paint Stores – SHW sells its branded paints, stains, tools, and equipment through its 3,354 company-operated stores in the U.S., Canada, Jamaica, Puerto Rico, St. Maarten, Trinidad and Tobago, and the Virgin Islands. Six products are GreenGuard Indoor Air Quality Certified (an independent air quality agency). About 62% of revenue.
Consumer Group – SHW sells its branded, private-label paints, stains, varnishes, and industrial products through mass merchandisers, home centers, independent dealers, and hardware stores in the U.S., Canada, Mexico, Poland, and the U.K. About 16% of revenue.
Global Finishes Group – Manufactures and sells OEM product finishes, automotive finishes, protective and marine coatings, and architectural coatings in North and South America, Europe, and Asia through 539 company-owned architectural, automotive, industrial, and chemical coatings branches. This segment also distributes SHW products in 19 developing countries through wholly owned subsidiaries, JV’s, licensees of technology, and trademarks. About 22% of revenue.
2) What is the competitive landscape?
SHW is the biggest manufacturer of paints and coatings in the U.S. Customers range from professional painting contractors to do-it-yourself homeowners to property managers to industrial manufacturers to original equipment manufacturers (OEMs). While other big players exist, the majority of sales go to professionals, to whom coating quality holds high importance, meaning that SHW competes on quality as well as price.
3) Is this a good long-term business?
SHW’s business is certainly tied to the US housing market, so a slump there isn’t making things any easier for the firm. Also, the company is tied up in various lawsuits—some regarding lead paint, which could lead to costly clean-up expenditures. The company’s overall track record, though, is impressive – shareholders have received an annual return of almost 14%. This figure includes dividends, which the company has never missed; despite the downturn, SHW actually increased its dividend $0.02 to $1.42 a share. The need for paint and coatings is not going anywhere long-term, and SHW is increasingly positioning itself abroad, building on existing operations in China and India and setting up new operations in developing countries. SHW is also an industry leader in newer, environmentally-friendly paints and coatings. Overall, this is a company with a solid management team that has fared well through good times and bad.