The Valspar Corp (NYSE: VAL) and Sherwin-Williams Company (The) (NYSE:SHW) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Profitability

This table compares The Valspar Corp and Sherwin-Williams Company (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Valspar Corp 6.89% 27.08% 6.98%
Sherwin-Williams Company (The) 9.14% 63.81% 12.23%

Risk & Volatility

The Valspar Corp has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500. Comparatively, Sherwin-Williams Company (The) has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for The Valspar Corp and Sherwin-Williams Company (The), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Valspar Corp 0 3 0 0 2.00
Sherwin-Williams Company (The) 1 5 12 0 2.61

The Valspar Corp presently has a consensus price target of $110.50, suggesting a potential downside of 2.20%. Sherwin-Williams Company (The) has a consensus price target of $362.46, suggesting a potential upside of 9.21%. Given Sherwin-Williams Company (The)’s stronger consensus rating and higher possible upside, analysts plainly believe Sherwin-Williams Company (The) is more favorable than The Valspar Corp.

Dividends

The Valspar Corp pays an annual dividend of $1.48 per share and has a dividend yield of 1.3%. Sherwin-Williams Company (The) pays an annual dividend of $3.40 per share and has a dividend yield of 1.0%. The Valspar Corp pays out 34.0% of its earnings in the form of a dividend. Sherwin-Williams Company (The) pays out 28.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. The Valspar Corp has raised its dividend for 35 consecutive years and Sherwin-Williams Company (The) has raised its dividend for 38 consecutive years.

Institutional and Insider Ownership

69.6% of The Valspar Corp shares are held by institutional investors. Comparatively, 72.9% of Sherwin-Williams Company (The) shares are held by institutional investors. 3.1% of The Valspar Corp shares are held by company insiders. Comparatively, 1.7% of Sherwin-Williams Company (The) shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares The Valspar Corp and Sherwin-Williams Company (The)’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Valspar Corp N/A N/A N/A $4.35 25.97
Sherwin-Williams Company (The) $12.56 billion 2.45 $2.11 billion $12.12 27.38

Sherwin-Williams Company (The) has higher revenue and earnings than The Valspar Corp. The Valspar Corp is trading at a lower price-to-earnings ratio than Sherwin-Williams Company (The), indicating that it is currently the more affordable of the two stocks.

Summary

Sherwin-Williams Company (The) beats The Valspar Corp on 11 of the 14 factors compared between the two stocks.

The Valspar Corp Company Profile

The Valspar Corporation is engaged in developing, manufacturing and distributing a range of coatings, paints and related products. The Company operates through two segments: Coatings and Paints. The Coatings segment includes its industrial product lines and packaging product line. The Company offers decorative and protective coatings for metal, wood and plastic primarily for sale to original equipment manufacturing (OEM) customers in Africa, Asia, Australia, Europe, North America and South America. The Paints segment includes consumer paints and automotive paint refinishes product lines. The Company offers a range of paints, primers, topcoats and aerosol spray paints through retailers, distribution networks and the Company-owned stores. The Company offers a portfolio of interior and exterior decorative paints, stains, primers, varnishes and specialty decorative products, such as enamels, aerosols and faux finishes, used in both the do-it-yourself and professional markets.

Sherwin-Williams Company (The) Company Profile

The Sherwin-Williams Company (Sherwin-Williams) is engaged in the development, manufacture, distribution and sale of paint, coatings and related products. The Company’s segments are Paint Stores Group, Consumer Group, Global Finishes Group, Latin America Coatings Group and Administrative. The Paint Stores Group markets and sells Sherwin-Williams branded architectural paint and coatings, protective and marine products, original equipment manufacturer (OEM) product finishes and related items. The Consumer Group segment manufactures and distributes a range of paint, coatings and related products. The Global Finishes Group develops, licenses and manufactures a range of protective and marine products, automotive finishes and refinish products, OEM product finishes and related products. The Latin America Coatings Group develops, licenses, manufactures and distributes a range of architectural paint and coatings, protective and marine products, OEM product finishes and related products.

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