The Sherwin-Williams Company (NYSE: SHW ) is a supremely well-managed company that operates in the highly fragmented market of selling paint and coatings. As shown in the graph below, it has an incredible history ofI have been investing in the stock market since I was 17 years old, and over the 25+ years since I have learned the joy of compounding, the value of dividend reinvesting, and the principle that patient investing through good times and bad brings the greatest rewards. I believe the key to creating ...

Core Insights - Sherwin-Williams has appointed Bob Gamgort to its Board of Directors, bringing extensive leadership experience in the consumer products industry [1] - Gamgort's previous roles include Executive Chairman and CEO of Keurig Dr Pepper, and CEO of Pinnacle Foods, indicating a strong background in managing large consumer brands [1][2] - Sherwin-Williams is a global leader in the manufacture and sale of paint and coatings, with a diverse portfolio of well-known brands and a significant retail presence [3] Company Overview - Founded in 1866, Sherwin-Williams specializes in paint, coatings, and related products for various customer segments including professional, industrial, commercial, and retail [3] - The company operates over 5,000 stores and branches, selling products under brands such as Sherwin-Williams®, Valspar®, and Krylon® [3] - Sherwin-Williams Performance Coatings Group offers engineered solutions for construction, industrial, packaging, and transportation markets in over 120 countries [3]

Financial Results Announcement - The Sherwin-Williams Company will announce its financial results for the first quarter ended March 31, 2025, prior to market open on April 29, 2025 [1] - A copy of the press release and information regarding the company's financial condition and reportable segment results will be available on their website [1] Conference Call Details - The company will host a conference call at 10:00 a.m. EDT on April 29, 2025, to discuss its financial results and outlook for the second quarter and full year 2025 [2] - The call will feature participation from Sherwin-Williams' Chair, President, and CEO, Heidi Petz, along with other senior executives [2] Webcast Information - The conference call will be webcast in listen-only mode, with an archived replay available approximately two hours after the call ends [3]

Core Viewpoint - The article discusses the investment recommendation for Sherwin-Williams by The Motley Fool, highlighting its potential as a strong investment opportunity [1]. Company Summary - Sherwin-Williams is recommended by The Motley Fool, indicating a positive outlook on the company's performance and growth potential [1].

Financial Reporting and Internal Controls - The Sherwin-Williams Company reported effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria[263]. - The consolidated financial statements present a fair view of the Company's financial position as of December 31, 2024, 2023, and 2022, in accordance with U.S. GAAP[279]. - The Audit Committee meets quarterly to review the adequacy of financial controls and the effectiveness of internal control over financial reporting[275]. - The independent registered public accounting firm expressed an unqualified opinion on the effectiveness of internal control over financial reporting as of December 31, 2024[263]. - The Company conducted an assessment of internal control effectiveness based on the 2013 Internal Control – Integrated Framework[259]. - The Company has designed safeguards to reduce the risk of material misstatements in financial reporting[258]. Financial Performance - Net sales for the year ended December 31, 2024, were $23,098.5 million, a slight increase from $23,051.9 million in 2023, representing a growth of 0.2%[288]. - Gross profit increased to $11,195.1 million in 2024, up from $10,758.1 million in 2023, reflecting a gross margin of 48.5%, compared to 46.7% in the previous year[288]. - Net income for 2024 was $2,681.4 million, an increase of 12.2% from $2,388.8 million in 2023, with diluted earnings per share rising to $10.55 from $9.25[288]. - Comprehensive income for 2024 was $2,430.5 million, a decrease from $2,465.1 million in 2023, primarily due to foreign currency translation adjustments[291]. - The company reported total assets of $23,632.6 million as of December 31, 2024, an increase from $22,954.4 million in 2023[294]. - Current liabilities increased to $6,808.7 million in 2024, compared to $6,626.9 million in 2023, primarily due to higher short-term borrowings[294]. - The company’s retained earnings grew significantly to $7,246.3 million in 2024, up from $5,288.3 million in 2023, indicating strong profitability retention[294]. Expenses and Cash Flow - Selling, general and administrative expenses were $7,422.1 million in 2024, representing 32.1% of net sales, compared to 30.6% in 2023[288]. - The company’s interest expense was $415.7 million in 2024, slightly down from $417.5 million in 2023, reflecting effective debt management[288]. - Net operating cash for 2024 was $3,153.2 million, down from $3,521.9 million in 2023, reflecting a decrease of 10.4%[297]. - Cash dividends per share increased to $2.86 in 2024 from $2.42 in 2023, marking an 18.2% increase[299]. - The company reported a decrease in cash and cash equivalents at the end of 2024 to $210.4 million from $276.8 million at the end of 2023, a decline of 24.0%[297]. - The company incurred $779.8 million in income taxes paid in 2024, a slight decrease from $816.7 million in 2023[297]. Investments and Acquisitions - The Company signed an agreement to acquire BASF's Brazilian decorative paints business for $1.15 billion, with annual sales of approximately $525 million[347][348]. - The Company completed the acquisition of a metal packaging coatings business for approximately $80 million, recognizing $21.1 million of goodwill and $27.9 million of finite-lived intangibles[350][364]. - The Company finalized the acquisition of SIC Holding for approximately $290 million, resulting in $181.3 million of goodwill and $110.8 million of finite-lived intangibles[352][365]. - The Company expects to finalize the purchase price allocation for the recent acquisitions within the allowable measurement period, with no material impact on consolidated financial results[351]. Liabilities and Debt Management - Long-term debt totaled $9,226.0 million as of December 31, 2024, down from $9,476.7 million in 2023[375]. - The Company repaid $600.0 million of 4.05% senior notes due August 2024 and issued $400.0 million of 4.55% senior notes due 2028[376]. - The Company had unused capacity under its various credit agreements of $3.274 billion as of December 31, 2024[385]. - Domestic commercial paper borrowings increased to $655.6 million in 2024 from $347.7 million in 2023[385]. - The weighted average interest rate for domestic short-term borrowings was 4.7% in 2024, down from 5.5% in 2023[385]. Environmental and Legal Matters - The company is involved in various litigation cases, including lead pigment and lead-based paint litigation, which may have a material impact on its financial condition[428]. - The company is vigorously defending against lead pigment and lead-based paint litigation, expecting additional claims in the future[431]. - The Ohio Supreme Court ruled in favor of the insurers regarding insurance coverage for lead pigment abatement, which may affect the company's financial condition[440]. - The company is currently facing a lawsuit from the New Jersey Department of Environmental Protection seeking recovery for alleged hazardous substance discharges[442]. Employee Benefits and Pension Plans - The Company had 32,283 active employees covered by domestic health care plans in 2024, with benefit costs amounting to $382.6 million, an increase from $363.2 million in 2023[389]. - The annual contribution for the domestic defined contribution pension plan was $103.5 million in 2024, up from $97.8 million in 2023, reflecting a growth of 1.8%[390]. - The domestic defined benefit pension plan was overfunded as of December 31, 2024, with a projected benefit obligation of $95.3 million and fair value of plan assets at $148.7 million, resulting in excess plan assets of $53.4 million[392]. - The Company expects to make benefit payments of $19.2 million in 2025 and a total of $139.2 million from 2030 through 2034 for all defined benefit pension plans[394]. Stock and Shareholder Matters - As of December 31, 2024, the company had 900,000,000 shares of common stock and 30,000,000 shares of serial preferred stock authorized for issuance[444]. - The total dividends declared and paid on common stock in 2024 amounted to $723.4 million, with a cash dividend per share of $2.86[449]. - The company purchased 5,200,000 treasury shares during the year ended December 31, 2024, increasing the total treasury stock to 25,688,335 shares[448]. - The number of shares outstanding decreased to 251,291,100 as of December 31, 2024, down from 254,543,290 in 2023[448].

Core Points - The Sherwin-Williams Company announced a quarterly dividend of $0.79 per common share, marking a 10.5% increase from the $0.715 paid in the same quarter of 2024 [1] - This dividend increase follows a remarkable streak of 46 consecutive years of dividend increases [1] - The dividend is payable on March 14, 2025, to shareholders of record on March 3, 2025 [1] Financial Summary - The new dividend amount is $0.79 per share, up from $0.715, reflecting a significant increase [1] - The increase in dividend reflects the company's strong financial performance and commitment to returning value to shareholders [1]

Core Viewpoint - Sherwin-Williams Company (SHW) has agreed to acquire BASF Group's Brazilian architectural paints business, Suvinil, for $1.15 billion in cash, aiming to enhance its market position in Brazil [1][3]. Company Overview - The Suvinil business generated approximately $525 million in sales for the year ending December 31, 2024, and is recognized as a leading provider of architectural paints in Brazil [1][2]. - Suvinil operates two production facilities in Brazil and employs around 1,000 people [2]. Strategic Implications - The acquisition is expected to accelerate profitable growth for SHW in the Brazilian market by leveraging Suvinil's established brand and innovative product portfolio [3]. - SHW plans to finance the acquisition through a mix of cash reserves, available liquidity, and new debt [4]. Financial Performance - SHW's stock has increased by 15.4% over the past year, contrasting with a 17.8% decline in the broader industry [4].

Core Viewpoint - Sherwin-Williams has entered into a definitive agreement to acquire BASF's Brazilian architectural paints business, Suvinil, for $1.15 billion in cash, enhancing its market position in Brazil's paint industry [1][3]. Company Overview - Sherwin-Williams is a global leader in the manufacture and sale of paint and coatings, with a diverse portfolio of well-known brands and a strong distribution network [4]. - The company operates over 5,000 stores and serves various customer segments, including professional, industrial, and retail [4]. Acquisition Details - The acquisition of Suvinil, which had sales of approximately $525 million in 2024, is expected to provide significant growth and operational synergies [2][5]. - Suvinil is recognized as a leading provider of architectural paints in Brazil, known for its innovative products and strong brand reputation [2][3]. - The transaction is anticipated to close in the second half of 2025, pending regulatory approval in Brazil [3][5]. Strategic Implications - The acquisition is expected to accelerate Sherwin-Williams' growth in the Brazilian market, leveraging Suvinil's established brand and distribution channels [3][5]. - The purchase price reflects a low teens EBITDA multiple, indicating a favorable valuation based on expected post-transaction synergies [3][5]. - Sherwin-Williams plans to finance the acquisition through cash on hand, existing liquidity, and new debt, maintaining a net-debt to EBITDA ratio within the targeted range of 2.0 to 2.5 times [5].

Core Insights - The article emphasizes a fundamentals-based approach to value investing, highlighting the importance of long-term durability and robust balance sheets over low multiples [1] - It challenges the misconception that low multiple stocks are inherently cheap, advocating for a focus on companies with steady long-term growth and minimal cyclicality [1] - The author acknowledges the risks associated with investing in successful companies, particularly the potential to overpay, but suggests that in certain situations, the growth potential may outweigh immediate price concerns [1] Company Analysis - The Sherwin-Williams Company (NYSE: SHW) was recommended as a buy in August 2024, based on expectations of an improving macro environment due to anticipated rate cuts [1] - The analysis indicates a preference for companies that demonstrate consistent growth and financial stability, which are seen as more attractive investment opportunities [1] Investment Philosophy - The article advocates for a value investing strategy that prioritizes long-term growth and financial health over short-term price metrics [1] - It suggests that while valuation is important, there are scenarios where the potential for future development can justify higher current prices [1]

Q4 and Full Year 2024 Results January 30, 2025 FORWARD-LOOKING STATEMENTS Certain statements contained in this presentation constitute "forward-looking statements" within the meaning of federal securities laws. These forward-looking statements are based upon management's current expectations, predictions, estimates, assumptions and beliefs concerning future events and conditions and may discuss, among other things, anticipated future performance (including sales and earnings), expected growth, future busine ...