Definitive Analysis
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The Sherwin-Williams Company (0L5V.L)

Company Dividend Discount ModelIndustry: Industrial MaterialsSector: Basic Materials

Valuation Snapshot

Stable Growth$239.52 - $635.37$366.24
Multi-Stage$165.05 - $180.27$172.52
Blended Fair Value$269.38
Current Price$346.26
Upside-22.20%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS11.44%12.89%2.872.482.462.331.941.671.281.271.240.99
YoY Growth--15.99%0.84%5.35%20.31%15.97%30.32%1.22%2.22%25.01%15.97%
Dividend Yield--0.82%0.73%1.09%0.93%0.79%1.09%0.89%0.97%1.20%1.04%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,571.80
(-) Cash Dividends Paid (M)773.80
(=) Cash Retained (M)1,798.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)514.36321.48192.89
Cash Retained (M)1,798.001,798.001,798.00
(-) Cash Required (M)-514.36-321.48-192.89
(=) Excess Retained (M)1,283.641,476.531,605.12
(/) Shares Outstanding (M)251.88251.88251.88
(=) Excess Retained per Share5.105.866.37
LTM Dividend per Share3.073.073.07
(+) Excess Retained per Share5.105.866.37
(=) Adjusted Dividend8.178.939.44
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$239.52$366.24$635.37
Upside / Downside-30.83%5.77%83.49%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,571.802,738.972,917.003,106.603,308.533,523.593,629.30
Payout Ratio30.09%42.07%54.05%66.04%78.02%90.00%92.50%
Projected Dividends (M)773.801,152.291,576.722,051.452,581.243,171.233,357.10

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)1,046.281,056.201,066.12
Year 2 PV (M)1,299.951,324.711,349.70
Year 3 PV (M)1,535.751,579.831,624.75
Year 4 PV (M)1,754.581,822.051,891.46
Year 5 PV (M)1,957.302,051.842,150.00
PV of Terminal Value (M)33,978.7335,619.9137,323.91
Equity Value (M)41,572.5843,454.5445,405.93
Shares Outstanding (M)251.88251.88251.88
Fair Value$165.05$172.52$180.27
Upside / Downside-52.33%-50.17%-47.94%

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