Sherwin-Williams Company (NYSE:SHW)

The confidence of this company and thier employees, who basically own the company will outpreform thier wallstreet goals and their competition as they have for the last 30 because that's what they do.

HIGH DIVIDENDS AS BONDS PLUMMET

I recently had a job interview with the IT department at Sherwin Williams. That was 2 months ago, and I have yet to recieve an answer as to if they will hire me or not. Every time I ask if they have made a decision, they respond with the same answer: "We will know within a week". A week or so passes, I inquire again, only to recieve the same response.

I suspect this response to a potential candidate for hire preludes some inner turmoil among top level management.

Short term decisions combined with the disregard for employees and/or potential employees will most certainly effect their productivity in the long run.

You cannot continue a run in as a Fortune 500 if you treat your employees as if they are destitute and worthless.

this stock has made me a lot of money!

PEG > 1 & S&P 1*

everybody needs paint!

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.

Because Cleveland is the city.

I am a retired 34 employee of the Sherwin-Williams Co. and I have spent time with the management team. I have very confidence that Sherwin-Williams management will do what is necessary to turn a profit in these very difficult times. No matter what the balance of the market is doing Sherwin-Williams will be ahead of the pack.

Less building, less machinary running, less paint we need.

This account tracks the performance of the investment firm Ruane, Cunniff, and Goldfarb - the investment manager of Sequoia Fund.

Looking at how SW has grown internally and through aqusition in the past 20 years, this trend will not stop. Their stores are well staffed and are leaders in new paint technology.

Over the last 10 years the PE multiple for SHW has been reletatively stable between 13 and 14. Given that the company expects to earn $3 to $4 a share in 2009 the most optomistic 12 month price target that I can justify is $56 a share. This would be a good exit point.

Businesses and homeowners are painting and redecorating, rather than switching offices or doing full-on renovations.

Great cash flow, strong market share, good management

Undervalued

More people seem to be staying put these days in as much as the real estate markets have cooled down, people should be fixing up what they've got which should bode well for paint sales.

gobs of intangibles and goodwill that will be need to be written down. Sells at around 10x tangible book value. The A/R will prove to be a source of trouble too.

Even with a housing market such as we are and will continue to do so through 2009; home owners, people looking to sell their homes, et cetera will be purchasing paint -- lots of paint. Unfortunately, some of these aforementioned people might -- think that by pinching a few pennies -- in an extremely important improvement will buy a paint other that Sherwin-Williams. Short-term this may work out for those looking and deploying cheaper paints but they are only doing damage to themselves as Sherwin-Williams (albeit, a more expensive paint) is such an exquisite paint that it is worth spending those few extra pennies. I honestly believe, if put to the test, I would be able to easily distinguish something painted with Sherwin-Williams as opposed to another paint.
Then again some believe that there is a difference in taste between Pepsi and Coca-Cola -- I have no doubt that there is!
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