Is Sherwin-Williams Still a Buy After Its 115,000% Run?

• The overgarment institution has a storied history, but it's present facing a "very challenging environment."

• It grew net and gross by 3.3% and 3.2% twelvemonth implicit twelvemonth past quarter, respectively.

• The company's astir caller dividend hike, its 47th successful arsenic galore years, points to a coagulated outlook.

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In the 2nd 4th of its fiscal 1965, conscionable aft its archetypal nationalist offering the twelvemonth before, overgarment shaper Sherwin-Williams (NYSE: SHW) reported nett income of $1.06 million. Sixty years later, successful Q2 2025, it reported nett income of $754.7 million. Even erstwhile you relationship for the ostentation seen successful that time, that's a astir 7,200% emergence successful nett income.

Yet, Sherwin-Williams shares person risen acold faster, notching 115,000% gains since 1985, the archetypal twelvemonth its stock terms information is readily available. What explains the stratospheric gains of a paint-maker banal implicit the past 40 years?

Part of it is its sterling dividend history, arsenic it has accrued its dividend for 47 years and counting. But the main crushed is stock buybacks. The institution has aggressively repurchased shares implicit the years, an inherently shareholder-friendly signifier that boosts net per stock and yet stock price. In the past decennary alone, Sherwin-Williams has bought backmost implicit 53 cardinal shares, which is implicit 20% of the shares near outstanding.

Still, Sherwin-Williams shares are down astir 4% twelvemonth to day amid the S&P 500's 15% rise, and successful past October's net call, CEO Heidi Petz acknowledged "a precise challenging situation volition persist done the archetypal fractional of the twelvemonth and astir apt beyond that." This admittance followed quality successful September that the institution was temporarily halting its 401(k) lucifer for employees.

Given each that, should investors debar Sherwin-Williams contempt its storied history? Here's what the numbers archer us.

Sherwin-Williams is successful a cyclical business. People tin enactment disconnected buying that overgarment of overgarment erstwhile they're feeling pinched, and a slower lodging marketplace with falling operation further dampens demand. America's souring economical mood, combined with level location income nationwide, has caused the "very challenging environment" Petz alluded to.

The bully quality is that involvement rates are falling, and truthful is the 30-year fixed complaint owe average. In her net call, Petz was asked however overmuch farther it needs to autumn to catalyze request successful Sherwin-Williams' Paint Stores segment. Petz replied that "6% seems to beryllium the magic number," adding, "we are each hoping that the Fed makes immoderate shifts present successful the future."