The Sherwin-Williams Company (NYSE:SHW) and PPG Industries, Inc. (NYSE:PPG) are the two heavyweights of paint and coatings, and analysts see similar upside in both, roughly 23% for SHW and 20% for PPG. That is where the resemblance ends. Sherwin trades near 30 times trailing earnings and yields about 1%, while PPG trades near 15 times and yields 2.8%. One is priced as the best operator in the business; the other as a cheaper and more cyclical bet. The whole question is whether you are paying for quality or for the discount.
The Sherwin-Williams Company ranked 6th in our list of the 10 Reliable Dividend Stocks to Buy for Long-Term Investors. To see which stocks outranked it, click HERE.
Sherwin-Williams: The Premium Operator
Sherwin is the quality name. Its company-owned store network makes it the leader in architectural paint sold to professional painters. This is not a model rivals can easily match. The company has also compounded earnings for decades with steady pricing power. That track record is why the market pays up, near 30 times earnings. However, several analysts recently trimmed their price targets. And in September, Sherwin took out a new $750 million term loan to refinance debt, with total borrowings now above $15 billion. This has sharpened concerns in the Hold camp about leverage and a full valuation. If that leverage makes you nervous, here are 10 Stocks With Low Debt and Strong Free Cash Flow. Heading into its next earnings report, with roughly $3.66 in quarterly profit expected, Sherwin must keep executing to justify the price.
PPG Industries: The Cheaper, More Cyclical One
At about 15 times earnings, roughly half Sherwin’s multiple, with a 2.8% yield, PPG is far cheaper. The reason is that it leans more on industrial and global markets, where soft volumes and cost inflation have held it back. But the picture is improving. Last quarter sales rose 7%, volumes turned positive, and eight of its nine businesses grew, led by aerospace, where PPG just committed $70 million to expand a site in Huntsville, Alabama. Pricing now covers most of its cost inflation, and net debt has come down. The next earnings report will arrive on October 27. The discount is earned because PPG’s growth is slower and more tied to the economy than Sherwin’s, but the early recovery suggests the gloom may be lifting.
PPG isn’t the only discount analysts like. See 10 Best Affordable Stocks to Buy According to Wall Street Analysts.
The Trade-Off
So, the decision is between quality and value. Sherwin-Williams offers the superior franchise and the stronger moat. It has a long compounding record as well. But you pay 30 times and underwrite its rising debt. PPG, on the other hand, offers a far cheaper multiple and nearly triple the yield. Additionally, early signs indicate that its industrial and aerospace businesses are recovering, though the company’s growth is slower and more tied to the economic cycle. Over the past six months, SHW dropped 4.49%, and PPG fell 5.69%, trailing the Insider Monkey Billionaire Index’s 42% return. Both carry about the same upside to analyst targets. And making the call between the two? We leave it to you.
Institutional Positioning
Large investors clearly prefer the quality name. Insider Monkey data shows 74 hedge funds held The Sherwin-Williams Company at the end of the second quarter of 2026, almost flat with 73 the quarter before, while PPG Industries, Inc. had 32, up from 30. The much wider hedge-fund ownership of Sherwin mirrors the market’s willingness to pay up for the premium operator.
Hedge funds are crowding into Sherwin, but billionaires are backing other growth names too. See 10 Best Growth Stocks to Buy Now According to Billionaires.
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This article is originally published at Insider Monkey.
