Sherwin-Williams Company (The) (NYSE: SHW) and Axalta Coating Systems (NYSE:AXTA) are both mid-cap construction companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, profitability, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Sherwin-Williams Company (The) and Axalta Coating Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sherwin-Williams Company (The) 0 5 12 0 2.71
Axalta Coating Systems 1 6 9 0 2.50

Sherwin-Williams Company (The) presently has a consensus price target of $404.88, suggesting a potential upside of 3.78%. Axalta Coating Systems has a consensus price target of $33.64, suggesting a potential downside of 0.67%. Given Sherwin-Williams Company (The)’s stronger consensus rating and higher probable upside, research analysts plainly believe Sherwin-Williams Company (The) is more favorable than Axalta Coating Systems.

Institutional & Insider Ownership

73.6% of Sherwin-Williams Company (The) shares are held by institutional investors. Comparatively, 96.9% of Axalta Coating Systems shares are held by institutional investors. 1.7% of Sherwin-Williams Company (The) shares are held by insiders. Comparatively, 2.3% of Axalta Coating Systems shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Sherwin-Williams Company (The) and Axalta Coating Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sherwin-Williams Company (The) 7.82% 58.02% 9.53%
Axalta Coating Systems 1.46% 19.91% 4.30%

Volatility & Risk

Sherwin-Williams Company (The) has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, Axalta Coating Systems has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500.

Dividends

Sherwin-Williams Company (The) pays an annual dividend of $3.40 per share and has a dividend yield of 0.9%. Axalta Coating Systems does not pay a dividend. Sherwin-Williams Company (The) pays out 29.9% of its earnings in the form of a dividend. Axalta Coating Systems has raised its dividend for 38 consecutive years.

Earnings & Valuation

This table compares Sherwin-Williams Company (The) and Axalta Coating Systems’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Sherwin-Williams Company (The) $11.86 billion 3.08 $1.13 billion $11.37 34.31
Axalta Coating Systems $4.07 billion 2.03 $41.80 million $0.24 141.13

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

Summary

Sherwin-Williams Company (The) beats Axalta Coating Systems on 11 of the 17 factors compared between the two stocks.

About Sherwin-Williams Company (The)

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.

About Axalta Coating Systems

Axalta Coating Systems Ltd. is a holding company. The Company is a manufacturer, marketer and distributor of coatings systems primarily serving the transportation industry. The Company’s segments include Performance Coatings and Transportation Coatings. Through its Performance Coatings segment, the Company provides liquid and powder coatings solutions to a fragmented and local customer base. Through its Transportation Coatings segment, the Company provides coating technologies to original equipment manufacturers (OEMs) of light and commercial vehicles. The Performance Coatings segment serves various end markets, including refinish and industrial. The Company develops, markets and supplies a portfolio of coatings systems and color matching technologies. The Company also develops and supplies an array of coatings systems for a range of commercial applications, including heavy-duty truck (HDT), bus, rail and agricultural construction equipment (ACE).

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