Sherwin-Williams Company (SHW) Wins All Of The Time

Sherwin-Williams Company (NYSE:SHW) continues to impress, recently reporting a record first-quarter profit of $1.11, 17% higher than last year. This is just a follow-up to a record year in 2012.

Sales for the quarter were slightly less impressive, only increasing by 1.4%, but still rising to a new record level. The company expects sales to be better next quarter, with a 5% to 9% increase over the same quarter last year. For the full year, management expects earnings to be as much as 25% higher than last year, an impressive feat given the difficulty of beating last year’s results.

Sherwin-Williams Company (NYSE:SHW), along with some other home-improvement stocks, benefits from being part of that rare breed of stocks that do well when times are good, and still do well when times are bad. If the housing market is good, new homes get built en masse, and those homes need to be painted and floored. Hence, with U.S. housing starts up nearly 90% over the past couple of years, homebuilders KB Home (NYSE:KBH) and Beazer Homes USA, Inc. (NYSE:BZH) have seen revenues finally starting to recover, and companies such as Sherwin-Williams and Lumber Liquidators Holdings Inc (NYSE:LL) are being pulled along for the ride.

If the market is bad, however, homeowners who’d planned on moving instead settle for refurnishing, and those who’d planned on selling resort to repainting and putting in new wood flooring to entice buyers. Despite the nascent recovery, KB Home (NYSE:KBH) and Beazer Homes USA, Inc. (NYSE:BZH) have both had sales fall 80% since U.S. housing starts peaked in 2006, but sales at Sherwin-Williams Company (NYSE:SHW) are up 22.5%, and Lumber Liquidators Holdings Inc (NYSE:LL) has grown sales an amazing 158%, proving that homeowners didn’t just give up and let the neighborhood go.

Sherwin-Williams Company (NYSE:SHW) is also expected to soon complete its acquisition of Comex, the largest paint company in Mexico. This purchase will give Sherwin-Williams Company (NYSE:SHW) a near-complete stranglehold on the paint market in much of the Western Hemisphere, allowing it to profit from the U.S. housing recovery at the same time that it profits from emerging markets in Latin America.

While it’s worth noting that Sherwin-Williams Company (NYSE:SHW)’ stock has doubled since the start of 2012, earnings have grown even faster. At a current price-to-earnings-growth ratio of 0.77, the stock appears slightly undervalued. As the housing recovery continues to mount, Sherwin-Williams will almost certainly continue to grow as well.

The article This Company Wins in Good Times and Bad originally appeared on Fool.com and is written by Jacob Roche.

Fool contributor Jacob Roche has no position in any stocks mentioned. The Motley Fool recommends Lumber Liquidators and Sherwin-Williams and owns shares of Lumber Liquidators.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!