Market Intelligence Center  Nov 10  Comment 
After closing Monday at $266.56, Sherwin-Williams Co (SHW) presents an attractive opportunity to get a 2.62% return in just 66 days, which is an annualized return of 14.49% (for comparison purposes only). To enter this trade, sell one Jan. '16...
Market Intelligence Center  Nov 4  Comment 
For a hedged play on Sherwin-Williams Co (SHW) MarketIntelligenceCenter.com’s patented trade-picking algorithms recommend the Jan. '16 $260.00 covered call for a net debit in the $253.99 area. That is also the break-even stock price for the...
Market Intelligence Center  Nov 3  Comment 
MarketIntelligenceCenter.com's option-trade picking algorithms have identified an attractive covered-call trade on Sherwin-Williams Co (SHW). Look at the Jan. '16 $260.00 covered call for a net debit in the $253.13 area. This trade has a...
Motley Fool  Nov 1  Comment 
The paint specialist saw particularly good conditions in its stores and consumer segment.
CNNMoney.com  Oct 31  Comment 
Sherwin-Williams wants to paint a cleaner picture of hospitals.
Forbes  Oct 30  Comment 
In trading on Friday, the iShares U.S. Home Construction ETF (ITB) is outperforming other ETFs, up about 1.4% on the day.  Components of that ETF showing particular strength include shares of Cavco Industries (CVCO), up about 17.4% and shares of...
Motley Fool  Oct 29  Comment 
A rundown of key developments in the stock market today.
Market Intelligence Center  Oct 29  Comment 
After closing Wednesday at $246.76, Sherwin-Williams Co (SHW) presents an attractive opportunity to get a 2.58% return in just 50 days, which is an annualized return of 18.85% (for comparison purposes only). To enter this trade, sell one Dec. '15...
newratings.com  Oct 29  Comment 
WASHINGTON (dpa-AFX) - Sherwin-Williams Co (SHW) released a profit for its third quarter that climbed compared to the same period last year. The company said its bottom line totaled $374.49 million, or $3.97 per share. This was up from $326.24...


Sherwin-Williams Company (NYSE:SHW) is the largest U.S. producer of architectural coatings(house paint) by revenue. The company also produces paint and finishes for automobiles and planes. SHW sells its products domestically and internationally through its own retail stores and through third party distributors. Store expansion has played an important role in SHW's revenue growth over the past few years. In fiscal 2010, SHW opened 35 new branches in the world, totaling to 564 company-operated branches.[1]

SHW sells premium (e.g. high priced) paints to professional painters and has benefited from the growth of its core market as homeowners have increasingly moved away from do-it-yourself paint jobs, in favor of hiring professional painters. Conversely, the company remains exposed to fluctuations in the U.S. housing market. Existing home sales are directly correlated with home improvements, including paint jobs.

Business Financials

SHW has three business segments: the Paint Stores Group, the Consumer Group and the Global Group:

  • The Paint Stores Group consists of 3,390 company-operated specialty paint stores in North America as of fiscal 2010.[2] This division sells Sherwin-Williams branded paint products to end use customers, from professional contractors to homeowners.[3] This segment of the business accounts for most of their revenues and profits, as seen in the chart below.
  • The Consumer Group distributes Sherwin-Williams branded paint and other products to third party customers such as mass merchandisers, home centers, independent paint dealers, hardware stores and automotive retailers, among others, for resale to end use customers.[4]
  • The Global Finishes Group sells Sherwin-Williams branded paint, coatings, and related products internationally through 564 company-operated architectural, automotive, industrial and chemical coatings branches with distribution in more than 30 countries worldwide, primarily in Europe, South America, and Asia.[5]

FY2010 (Ended December 31, 2010)

  • Revenue up 9.6% to $7,776.42 million USD compared to FY2009.
  • Net income up 6.1% to $462.49 million USD compared to FY2009.

Q1 FY2011 Earnings Summary

  • Revenue up 19% to $1.86 billion from same quarter FY2010.
  • Net income up more than double to $68. million from same quarter FY2010.

Key Trends and Forces

Because New Homes often Require Painting, U.S. Housing Market Weakness Directly Affects SHW's Sales

A significant decrease in the quantity of homes sold results in a decrease in touch-up painting by the seller and remodeling painting by the new resident. Whenever a home is sold, there is usually some remodeling involved, and this remodeling will usually involve some form of repainting. Statistics show that a homeowner who has been in a place for 5 years makes an average of only 0.5 paint transactions per year, while a resident who has been there for 2 years or less makes an average of over 7 times that number.

On the other hand, as U.S. demographics have shifted towards more dual-income families, families have found professional paint jobs to be more affordable, while finding themselves with less time for Do-It-Yourself (DIY) projects has . Over the past 30 years the market share of professionals in the residential paint market has grown from 40% to 60%.[6] SHW is well positioned to capitalize on this trend, because its paint stores target the professional user. Additionally, professional users are more likely to buy the high quality (i.e. high priced) paint produced by Sherwin-Williams, and they are more brand loyal than the more price consumer. Most of SHW sales are to professional painters, so this trend has a large positive effect on their total revenue and profitability. In contrast, competitor Masco sells primarily to DIY customers in their kiosks in Home Depot.

SHW Intends to Capture China's Paint Market, the World's Second Largest

SHW has announced plans its intention to capture up to 60% of the Chinese paint market, the second largest market for paint products in the world. [7]. The company opened several factories in the country dedicated to producing finishes for the Chinese market, and within three years the company opened its first franchise store in Shanghai. Since then, it has grown its number of stores rapidly. The company's growing exposure to China and other international destinations, has been instrumental in helping the company to weather the downturn in the U.S. housing market.


The U.S. coatings market can be split into two major segments, the architectural coatings market and the industrial and commercial coatings market. Architectural coatings include interior and exterior paints stains and varnishes, etc.; Industrial and commercial coating includes auto and other industrial coating. SHW produces in both markets, but mostly in the architectural one, and has different competitors in each.

The Architectural Coatings Market

The architectural coatings market accounts for about 45% of the total coatings market. Sherwin-Williams is by far the largest producer in this market. Its revenues of 7.8 billion dwarf its closest competitors ICI, Benjamin Moore and Masco.

  • ICI: ICI was bought out by Akzo Nobel. They both distribute their products to large retailers and openbjbajrate 450 of their own retail stores in the U.S..[8]
  • Benjamin Moore: Benjamin Moore is a privately held company; both ICI and Benjamin Moore have estimated architectural coatings revenues of around $1.5 billion. Benjamin Moore operates about 1,200 signature stores in the U.S..[9]
  • Masco: Masco, notable for its line of Behr paints, had net sales of $1.629 billion from its "Decorative Architectural Products" business segment. Masco sells primarily to the DIY market with kiosks in all 2200+ Home Depot stores nationwide.

The Industrial and Commercial Coatings Market

Sherwin-Williams is a small player in this segment of the coatings market, which is largely dominated by the large chemical corporations such as Akzo Nobel, DuPont, and PPG. This segment accounts for only about 8% of Sherwin-Williams' yearly sales. [citation needed]


  1. Sherwin-Williams 2010 Form 10-K, Page 2]
  2. SHW 2010 Annual Report Pg 2
  3. Sherwin-Williams 2009 Form 10-K, Page 5
  4. Sherwin-Williams 2009 Form 10-K, Page 2
  5. Sherwin-Williams 2009 Form 10-K, Page 7
  6. Bharat Book Bureau, "World Architectural Paints to 2009"
  7. [http://www.tmcnet.com/usubmit/2006/08/22/1823320.htm Sherwin Williams to Open First Franchised Store in China August 22, 2006
  8. ICI Paints Stores, "About ICI Paints"
  9. Benjamin Moore, "About Us: The Ultimate Retail Experience"
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