March 10, 2026 a 03:31 pm
SHW: Dividend Analysis - The Sherwin-Williams Company
🗣️ The Sherwin-Williams Company, with a robust history of consistent dividend payments and substantial growth, showcases a commitment to delivering shareholder return. Despite its currently modest dividend yield, its reliability and steady growth make it a worthwhile consideration for dividend-focused investors.
📊 Overview
The Sherwin-Williams Company operates in the Paints & Coatings sector. Its dividend yield of 0.89% may seem low; however, this is offset by the company's longstanding history of dividend payments over 42 years with no recent cuts or suspensions.
| Indicator | Details |
|---|---|
| Sector | Paints & Coatings |
| Dividend Yield | 0.89% |
| Current Dividend per Share | 3.21 USD |
| Dividend History | 42 years |
| Last Cut or Suspension | None |
📈 Dividend History
Analyzing the dividend history is crucial, as it reflects the company's payment consistency and policy reliability over time. Sherwin-Williams, with a dividend history spanning over 42 years, underscores steadfastness in shareholder remuneration.
| Year | Dividend per Share (USD) |
|---|---|
| 2026 | 0.80 |
| 2025 | 3.16 |
| 2024 | 2.86 |
| 2023 | 2.42 |
| 2022 | 2.40 |
📈 Dividend Growth
The growth in dividends over time highlights a company's increasing profitability and management's confidence in its financial health.
| Time | Growth |
|---|---|
| 3 years | 9.60% |
| 5 years | 12.08% |
The average dividend growth is 12.08% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
Payout ratios are a vital indicator of the company's capability to maintain its dividend policy. They assess the portion of earnings and cash flows dedicated to dividend payments.
| Key Figure | Ratio |
|---|---|
| EPS-based | 30.75% |
| Free Cash Flow-based | 29.92% |
A payout ratio of 30.75% for EPS and 29.92% for FCF suggests a sustainable dividend payment strategy, indicating room for growth without overburdening the company's earnings or cash flows.
📊 Cashflow & Capital Efficiency
Cash flow stability and capital efficiency are metrics indicating how effectively a company generates cash and uses its capital to drive growth and shareholder value.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Free Cash Flow Yield | 3.31% | 2.41% | 3.32% |
| Earnings Yield | 3.00% | 3.10% | 3.22% |
| CAPEX to Operating Cash Flow | 25.23% | 33.93% | 23.11% |
| Stock-based Compensation to Revenue | 0.50% | 0.60% | 0.52% |
| Free Cash Flow / Operating Cash Flow Ratio | 74.77% | 66.06% | 76.89% |
The stable cash flow metrics and balanced capital efficiency demonstrate the company's effective operational management and prudent capital allocation strategies, paving the way for potential growth.
📊 Balance Sheet & Leverage Analysis
The balance sheet strength and leverage ratios provide insights into the company's financial stability, indicating how well it can manage debt and meet obligations.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Debt-to-Equity | 3.18 | 2.94 | 3.16 |
| Debt-to-Assets | 51.45% | 50.41% | 56.11% |
| Debt-to-Capital | 76.07% | 74.62% | 75.96% |
| Net Debt to EBITDA | 2.78 | 2.60 | 3.26 |
| Current Ratio | 0.83 | 0.79 | 0.87 |
| Quick Ratio | 0.48 | 0.46 | 0.53 |
| Financial Leverage | 6.18 | 5.83 | 5.63 |
The high leverage ratios are offset by strong interest coverage and solvency ratios, suggesting manageable risk and effective debt utilization for growth activities.
📊 Fundamental Strength & Profitability
Profitability ratios and fundamental strengths gauge the return earned on investments and assets, essential for assessing operational efficiency and competitive advantage.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Return on Equity | 64.29% | 66.19% | 55.86% |
| Return on Assets | 10.41% | 11.35% | 9.92% |
| Return on Invested Capital | 15.18% | 15.38% | 15.21% |
| Net Margin | 10.36% | 11.61% | 10.90% |
| EBIT Margin | 15.30% | 16.74% | 16.15% |
| EBITDA Margin | 18.00% | 19.44% | 18.65% |
| Gross Margin | 46.67% | 48.47% | 48.93% |
| Research & Development to Revenue | 0% | 0% | 0% |
Strong margins and a high return on equity suggest efficient use of capital, providing a competitive edge and aligning with its strategic growth goals.
📈 Price Development
📊 Dividend Scoring System
| Category | Score | Visualizer |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 5 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 34 out of 40
📈 Rating
In conclusion, The Sherwin-Williams Company presents as a reliable choice for investors seeking consistent dividend income with a moderate growth potential. Its balance of financial stability and prudent payout strategy supports a sustained dividend policy, worthy of consideration in a diversified dividend portfolio.
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