SHW Value Scorecard - Sherwin-Williams

Value Scorecard · run 2026-10-18

13 value checks: 12 scored 1 to 5, plus moat evidence

32/60

low-moderate value score

Earnings & returns

EPS Trend

4/5

Diluted EPS: $7.72 (2022), $9.25 (2023), $10.55 (2024), $10.26 (2025). It rose every year but one and ended above 2022; the framework scores that as 4.

ROE Trend

5/5

ROE (net income / common equity): 65.1% (2022), 64.3% (2023), 66.2% (2024), 55.9% (2025). Median 64.7%, lowest 55.9%; the framework scores a median above 20% as 5.

ROIC

4/5

ROIC of 20.0%: earnings before interest and taxes of $3.80B (pre-tax income $3.34B plus interest expense $465.00M; the 10-K's financial data has no standard operating income figure) divided by $18.98B of capital (total assets $25.90B minus current liabilities $6.92B), fiscal year to Dec 31, 2025, as filed in the 10-K (SEC EDGAR). The framework scores 15-20% as 4.

Profit Margins

4/5

Net margin of 11.0%; the framework scores 10-20% as 4; gross margin 49.0%, operating margin 18.1%.

Balance sheet & cash

Debt-to-Equity

1/5

Debt-to-equity of 3.90; the framework scores above 2.5 as 1 (total debt $15.03B, total cash $293.50M).

Free Cash Flow

4/5

Free cash flow (operating cash flow minus capital expenditure): $1.28B (2022), $2.63B (2023), $2.08B (2024), $2.65B (2025). It rose every year but one and ended above 2022; the framework scores that as 4.

Retained Earnings

1/5

Retained earnings, as filed in the 10-Ks (SEC EDGAR): $3.52B (2022), $5.29B (2023), $7.25B (2024), $1.03B (2025). The latest figure is half the 2022 figure or less; the framework scores that as 1.

Valuation models

Graham IV

1/5

IV = EPS x (8.5 + 2g) x (4.4 / Y) = $10.85 x (8.5 + 2 x 5.3) x (4.4 / 4.5) = $202.63. Current price $335.20; price is 65.4% above the model value.

DCF Value

1/5

FCF/share = $10.323, stage 1 growth = 1.1% for 5 years, terminal growth = 3%, discount rate = 10%. Stage 1 PV = $40.36, PV of terminal value = $99.62, DCF value = $139.98. Current price $335.20; price is 139.5% above the model value.

Margin of Safety

1/5

Graham value $202.63 (price is 65.4% above the model value); DCF value $139.98 (price is 139.5% above the model value).

Price-to-Book

1/5

P/B of 20.99; the framework scores above 5.0 as 1.

Business quality

Moat Evidence

Not scored

A moat (a brand, a network, switching costs, patents, scale, a licence) is not a number in the filings, so Valerius doesn’t score it. Below are the figures and the words moat analysis starts from, from the company’s own 10-K filings. The conclusion is yours.

Return on capital, each year

Above 15% in 9 of 10 years (2016-2025); lowest 14.0%, highest 55.2%.

Gross margin, each year

Between 42.1% and 49.9% over 10 years (a range of 7.8 points).

Competition, in the company’s own words · 10-K filed Feb 19, 2026

We experience competition from many local, regional, national and international competitors of various sizes in the manufacture, distribution and sale of our paint, coatings and related products. We are a leading manufacturer and retailer of paint, coatings and related products to professional, industrial, commercial and retail customers, however, our competitive position varies for our different products and

The opening of the company’s “Competition” section in its 10-K, quoted word for word, not summarized or edited. It is the company’s own description, not Valerius’s view, and may include the company’s expectations. Open the filing.

Return on capital = operating income / (total assets − current liabilities), the ROIC row’s definition; 15% is the framework’s return threshold. For a year whose 10-K financial data has no standard operating income figure, earnings before interest and taxes (pre-tax income plus interest expense) is used. Gross margin = gross profit / revenue. Both from each year’s 10-K via SEC EDGAR. Moat analysis commonly looks at whether returns and margins held up over many years. These figures don’t say whether the company has an advantage, what it is, or whether it will last.

Capital Allocation

5/5

Capital allocation, 2022-2025: dividends or buybacks paid in every year (pass); $8.47B paid out against $8.65B of free cash flow (pass); total debt $12.51B to $12.94B, up 3.5%, 2.9x EBITDA (pass: not up more than 10%); shares outstanding 0.26B to 0.25B, down 4.3% (pass). 4 of 4 tests passed; the framework scores that as 5.

Filings

Company notices to the SEC

Not scored

Three kinds of event the company reported to the SEC in the last 5 years, from its filings on SEC EDGAR.

These are events the company reported to the SEC. An auditor change or a late filing can have many causes; each date links to the filing, where the company explains it. Valerius does not score these.

How the Graham and DCF values were calculated

  Graham Formula:
    IV = EPS x (8.5 + 2g) x (4.4 / Y)
    EPS = $10.85, g = 5.3%, Y = 4.5
    IV = $202.63
    Current price $335.20 vs Graham value $202.63 — price is 65.4% above the model value.

  DCF:
    FCF/share = $10.323
    Stage 1 growth = 1.1% for 5 years | terminal growth = 3.0% | discount rate = 10.0%
      Y1: $10.437 → PV $9.488
      Y2: $10.552 → PV $8.720
      Y3: $10.668 → PV $8.015
      Y4: $10.785 → PV $7.366
      Y5: $10.904 → PV $6.770
    Stage 1 PV sum = $40.36
    Terminal value at end of Y5 = $160.44
    PV of terminal value = $99.62
    DCF value = $139.98
    Current price $335.20 vs DCF value $139.98 — price is 139.5% above the model value.

Data from yfinance summary figures and financial statements, and from the company’s 10-K filings via SEC EDGAR; computed at a price of $335.20. Every score is calculated from the figures by the framework’s fixed rules, and the explanation beside it is generated from the same figures: Graham value, DCF value, margin of safety, ROIC, profit margins, debt-to-equity, price-to-book, EPS trend, ROE trend, free cash flow, retained earnings and capital allocation. No AI is involved in this scorecard. The moat is shown as evidence, without a score. Read each score with the figures beside it. Intrinsic value calculations are model outputs based on stated assumptions, not predictions.

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