Bottom Line Inc

June 14, 2017 | The Sherwin-Williams Company | SHW


This week’s Stock of the Week is a trusted name in home décor and is ready to take advantage of a recovering housing market as well as an aging population.

Color Coated

The Sherwin-Williams Company (SHW), the third-largest paint company in the world, helps investors tap into trends in both housing and demographics. It makes paints and other coatings and has a well-known brand name in North and South America, the Caribbean, Europe and Asia.

As the housing market continues to recover, Sherwin-Williams will benefit—many contractors favor its paints because they are high-quality, easy to use and can reduce contractor time on the job by being simpler to apply than many brands. Demographically, aging Baby Boomers will rely more on contractors to paint their homes instead of doing the work themselves—a further boost for the company.

Sherwin-Williams’ stock dividend has more than doubled in the past decade, and the payout ratio remains low, so there is room for it to grow. The dividend is currently $3.40/share/yr., recently yielding 1%. Revenue of $11.86 billion in 2016 should grow to $12.61 billion this year and $13.24 billion in 2018.

Fiscal year: December. Earnings per share: 2018 est./$13.24…2017 est./$12.61…2016/$11.99.

This Weeks Expert

Steven M. Rogé is portfolio manager at R.W. Rogé & Company, Beverly, Massachusetts, which manages $221 million.

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