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Why You Should Add Sherwin-Williams (SHW) to Your Portfolio
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The Sherwin-Williams Company (SHW - Free Report) remains committed to growing its retail operations and is witnessing strong demand in domestic markets.
The company currently carries a Zacks Rank #2 (Buy). We are optimistic about its prospects and believe that the time is right to add the stock to the portfolio as it looks poised to carry the momentum ahead.
Let’s take a look into the factors that make Sherwin-Williams an attractive choice for investors right now.
An Outperformer
Shares of Sherwin-Williams have gained 8.2% year to date, outperforming the 5.3% rise of its industry.
Image Source: Zacks Investment Research
Positive Earnings Surprise History
Sherwin-Williams’ earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average being 2.05%.
Superior Return on Equity (ROE)
Sherwin-Williams’ ROE of 86.3% compared with the industry average of 17.2% reflects the company’s efficiency in utilizing shareholders’ funds.
Domestic Demand, Cost Actions Aid SHW
Architectural sales volumes are increasing at the company’s Paint Stores Group division. The increasing number of retail stores demonstrates that SHW has invested in gaining a larger share of its end markets. It opened 72 net new stores in 2022 and is likely to open 80 to 100 new stores in the United States and Canada in 2023. In the first quarter of 2023, it added four net new stores.
SHW's cost-cutting initiatives, working capital reductions, supply chain optimization and productivity enhancements are resulting in margin growth. It undertakes price adjustments to offset rising costs, particularly in raw materials.
The company is additionally focusing on cost-cutting through restructuring, which is expected to be beneficial in 2023. It expects to save between $50 million and $70 million each year, with 75% of that amount saved by the end of 2023.
Sherwin-Williams has reinforced its position as a global leader in paints and coatings by acquiring Valspar and using its highly complementary offerings, strong brands and breakthrough technology. SHW's brand portfolio and customer relations in North America have grown, and the company's global finish business was enhanced with this buyout. The acquisition expanded its global base across Asia-Pacific, Europe, the Middle East and Africa and added new capabilities in the packaging and coil areas.
Other top-ranked stocks in the Constructions space include Arcosa Inc. (ACA - Free Report) , Boise Cascade Company (BCC - Free Report) and Cavco Industries Inc. (CVCO - Free Report) .
Arcosa is currently sporting a Zacks Rank #1 (Strong Buy). ACA’s earnings surpassed the Zacks Consensus Estimate in all the last four quarters. It has delivered a trailing four-quarter earnings surprise of 59.9%, on average. The stock has rallied 63.7% over the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
Boise Cascade currently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for BCC’s current-year earnings has been stable in the past 60 days. It has a trailing four-quarter earnings surprise of 19%, on average. The stock has gained 50.5% over the past year.
Cavco, currently carrying a Zacks Rank #2 (Buy), has gained 46.2% over the past year. The company’s earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 40.2%, on average.
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Why You Should Add Sherwin-Williams (SHW) to Your Portfolio
The Sherwin-Williams Company (SHW - Free Report) remains committed to growing its retail operations and is witnessing strong demand in domestic markets.
The company currently carries a Zacks Rank #2 (Buy). We are optimistic about its prospects and believe that the time is right to add the stock to the portfolio as it looks poised to carry the momentum ahead.
Let’s take a look into the factors that make Sherwin-Williams an attractive choice for investors right now.
An Outperformer
Shares of Sherwin-Williams have gained 8.2% year to date, outperforming the 5.3% rise of its industry.
Image Source: Zacks Investment Research
Positive Earnings Surprise History
Sherwin-Williams’ earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average being 2.05%.
Superior Return on Equity (ROE)
Sherwin-Williams’ ROE of 86.3% compared with the industry average of 17.2% reflects the company’s efficiency in utilizing shareholders’ funds.
Domestic Demand, Cost Actions Aid SHW
Architectural sales volumes are increasing at the company’s Paint Stores Group division. The increasing number of retail stores demonstrates that SHW has invested in gaining a larger share of its end markets. It opened 72 net new stores in 2022 and is likely to open 80 to 100 new stores in the United States and Canada in 2023. In the first quarter of 2023, it added four net new stores.
SHW's cost-cutting initiatives, working capital reductions, supply chain optimization and productivity enhancements are resulting in margin growth. It undertakes price adjustments to offset rising costs, particularly in raw materials.
The company is additionally focusing on cost-cutting through restructuring, which is expected to be beneficial in 2023. It expects to save between $50 million and $70 million each year, with 75% of that amount saved by the end of 2023.
Sherwin-Williams has reinforced its position as a global leader in paints and coatings by acquiring Valspar and using its highly complementary offerings, strong brands and breakthrough technology. SHW's brand portfolio and customer relations in North America have grown, and the company's global finish business was enhanced with this buyout. The acquisition expanded its global base across Asia-Pacific, Europe, the Middle East and Africa and added new capabilities in the packaging and coil areas.
The Sherwin-Williams Company Price and Consensus
The Sherwin-Williams Company price-consensus-chart | The Sherwin-Williams Company Quote
Other Stocks to Consider
Other top-ranked stocks in the Constructions space include Arcosa Inc. (ACA - Free Report) , Boise Cascade Company (BCC - Free Report) and Cavco Industries Inc. (CVCO - Free Report) .
Arcosa is currently sporting a Zacks Rank #1 (Strong Buy). ACA’s earnings surpassed the Zacks Consensus Estimate in all the last four quarters. It has delivered a trailing four-quarter earnings surprise of 59.9%, on average. The stock has rallied 63.7% over the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
Boise Cascade currently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for BCC’s current-year earnings has been stable in the past 60 days. It has a trailing four-quarter earnings surprise of 19%, on average. The stock has gained 50.5% over the past year.
Cavco, currently carrying a Zacks Rank #2 (Buy), has gained 46.2% over the past year. The company’s earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 40.2%, on average.