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Here's How Much You'd Have If You Invested $1000 in Sherwin-Williams a Decade Ago

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How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Sherwin-Williams (SHW - Free Report) ten years ago? It may not have been easy to hold on to SHW for all that time, but if you did, how much would your investment be worth today?

Sherwin-Williams' Business In-Depth

With that in mind, let's take a look at Sherwin-Williams' main business drivers.

Founded in 1866 and headquartered in Cleveland, OH, The Sherwin-Williams Company is into manufacturing and sales of paints, coatings and related products, primarily in the North and South America. It also has operations in the Caribbean region, Europe and Asia. Sherwin-Williams is one of the biggest paint companies in the United States and in the world. Its well-known brands include Dutch Boy, Minwax and Krylon. The company, on Jun 1, 2017, completed the purchase of rival paints maker Valspar in an all-cash transaction, creating a premier global paints and coatings company.

Sherwin-Williams made changes to its reporting structure, effective Jan 1, 2023, to manage and report the Latin America architectural paint business within the Consumer Brands Group. The Latin America business was earlier part of The Americas Group, which has now become the Paint Stores Group as a result of this change. The company started reporting segment results for the newly realigned Paint Stores Group and Consumer Brands Group starting with the first quarter of 2023.

The Paint Stores Group: The group produces and sells a wide array of industrial coatings, architectural paint and related products across North America through dedicated dealers and company-operated stores. The segment accounted for around 53% of Sherwin-Williams’ first-quarter 2023 sales.

The Consumer Brands Group: The division includes the company’s Consumer Group and Valspar's Consumer Paints segment as well as the Latin America architectural paint business. The segment operates highly efficient supply chain for paints and coatings related products across the globe. The segment accounted for around 16% of Sherwin-Williams’ first-quarter 2023 sales.

The Performance Coatings Group: The unit includes the company’s Global Finishes Group and Valspar's Coatings Group coupled with Valspar's Automotive Refinishes products business. It sells a wide array of industrial coatings and finishes for industrial wood, general industrial, protective and marine, packaging and automotive, coil and extrusion customers. The segment accounted for around 31% of Sherwin-Williams’ first-quarter 2023 sales.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Sherwin-Williams a decade ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in July 2013 would be worth $4,231.18, or a 323.12% gain, as of July 7, 2023, according to our calculations. Investors should note that this return excludes dividends but includes price increases.

Compare this to the S&P 500's rally of 170.34% and gold's return of 46.85% over the same time frame.

Analysts are anticipating more upside for SHW.

Earnings estimates for Sherwin-Williams for the second quarter have been going up over the past month. The company is expected to gain from synergies resulting from the Valspar acquisition. Favorable demand in domestic markets is expected to support sales volumes in the second quarter. The company is also expanding its retail operations to increase its market share. It is also taking cost control initiatives and adopting various supply chain optimization techniques to boost its margins. However, the company faces demand headwinds stemming from slowing economic activities and weak industrial activities in Europe and China. Volumes in the company’s industrial wood business are also expected to be hurt by the housing slowdown.  Higher wages and energy costs are also likely to hurt its results in 2023.

Shares have gained 5.80% over the past four weeks and there have been 2 higher earnings estimate revisions for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.

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