Pros and Cons of Investing in Sherwin — Williams.

PHOTO CREDIT: Sherwin — Williams

OVERVIEW

The Sherwin — Williams Company is a company based in the United States. The company designs, manufactures, and sells paint and other related products around the world. The company’s paint is used for single-family homes to large workspaces and apartments. The company was founded in 1866.

PROS:

  1. Sherwin — Williams is a great reopening play in an investor’s portfolio. The company saw a drop in demandfor some of its commercial products as construction companies stopped building or remodeling work spaces due to the work from home enviorment. However, once the pandemic is over, the company will be able to grow.
  2. Sherwin- Williams will continue to benefit from the booming housing market in the United States. As more houses are built, more paint is needed for both indoor structures and outdoor structures. This will help the company report strong numbers in the next couple of financial quarters. This will benefit investors in the company as well.
  3. A Biden administration will also positively benefit the company. Biden will ease trade tensions with our allies, something that will help the company increase its international sales. Biden will also incentivize home buying and remodeling, something that will also help the company sell more paint.
  4. Another aspect of the economy that is currently booming is the home remodeling business. Home owners and landlords want to remodel their homes and properties. This has further increased the demand for paint, something that Sherwin — Williams has capitalized on. This hs also benefited investors in the company.
  5. The company has reported rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has helped the company grow its business and expand its product offerings. This has also benefited investors in the company. In the financial year of 2020, the company reported revenues of around 18.36 billion and profits of around 2.03 billion. Both of these metrics are higher than what the company reported in the financial year of 2019 when they had revenues of around 17.9 billion and profits of around 1.54 billion.
PHOTO CREDIT: Yahoo Finance

CONS:

  1. The company faces tough competition in the paint industry. Some of these competitors include Home Depot, Lowes, PPG Industries, and many others. This competition might hurt the company and its investors.
  2. Sherwin — Williams will be negatively impacted by inflation. Higher comoddity prices (in order to make paint products) and higher shipping costs (in order to ship products around the world) has hurt the company’s margins and has caused the company to raise prices. This has hurt the company and its investors and will continue to do so until the prices return to normal.

MY OPINON

I think that Sherwin — Williams is a great long-term investment due to its positon as a good reopening play, a booming housing and home remodeling market, positive impacts from a Biden administration, as well as rising revenues and profits. However, tough competition and negative impacts from inflation might hurt the company and its investors.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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