Dividend Aristocrats Part 2: Sherwin-Williams

Sherwin-Williams (SHW) was founded in 1866. The company has steadily grown since then through consolidating the United States coatings industry.Today, Sherwin-Williams has a market cap of $22.3 billion.

Sherwin-Williams operates in 4 groups. The percentage of total profit each group has generated through the first 6 months of fiscal 2015 is listed below:

  • Paint Stores Group (68.6% of company profits)
  • Consumers Group (19.1% of company profits)
  • Global Finishes Group (10.8% of company profits)
  • Latin America Coatings Group (1.5% of company profits)
  • The Paint Stores Group is by far the most important group for Sherwin-Williams. The Paint Stores Group operates the company’s 4,025 exclusive paint stores in the United States, Canada, and the Caribbean.

    The Consumer Group sells the company’s products through various retailers in North America and Europe.

    The Global Finishes Group sells a wide range of coating products for the following industries: industrial, marine, and automotive.

    The Latin America Coatings Group generated just 1.5% of company profits through the first half of fiscal 2015. This Group sells coatings and finishes throughout Latin America.

    Profit growth for each Group through the first 6 months of fiscal 2015 as compared to the first 6 months if fiscal 2014 is shown below:

  • Paint Stores Group profits up 16.8%
  • Consumers Group profits up 18.2%
  • Global Finishes Group profits down 5.1%
  • Latin America Coatings Group profits down 13.5%
  • On a constant currency basis, the Global Finishes Group profits would be up around 2.2%, and the Latin America Coatings Group profits would be up about 2.1%.

    Even so, Sherwin-Williams North American operations are growing rapidly, while international operations are showing only very modest growth on a constant currency basis.

    Sherwin-Williams strong competitive advantages are geographically concentrated in North America.

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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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