22
Sherwin-Williams
For the past century, Sherwin-Williams has boasted that its paints cover the earth. That’s pure hyperbole: The company has virtually no business outside the Western Hemisphere. But in the U.S. its paints unquestionably cover more walls and ceilings than anyone else’s. Sherwin-William has been good to shareholders. As a matter of policy, the company pays out 30% of its earnings in dividends, which has resulted in 28 consecutive years of rising payouts. CEO Christopher Connor is confident that 2007 will be No. 29. Despite a drop in housing starts and a slowdown in home remodeling, he predicts the Cleveland company will earn up to 10% more this year than its record $576 million in 2006. How? By selling more to builders of nonresidential properties through its chain of 3,000 paint stores, and by expanding its automotive-paint operations in Latin America. With buckets of cash, Sherwin-Williams may also buy smaller paintmakers to lengthen its lead.
| Overall Grade | A |
|
| Market Data | SHW | |
| Market Value (2/28/2007) |
$8.9 Billion |
|
| Profitability* | 35.3% | A |
| Sales Growth Rate** | 13.5% | B |
| 12-Month Sales | $7.8 Billion |
|
| 12-Month Net Income | $0.6 Billion |
|
| Total Return | Past 12 Months49.6% | Past 36 Months100.7% |
| Economic Sector | Consumer Discretionary | |
| Industry | Home Improvement Retail | |
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
$FOOTNOTE
