Sherwin-Williams (NYSE:SHW) versus Shin-Etsu Chemical (OTCMKTS:SHECY) Head-To-Head Contrast

Shin-Etsu Chemical (OTCMKTS:SHECY) and Sherwin-Williams (NYSE:SHW) are both large-cap materials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Valuation & Earnings

This table compares Shin-Etsu Chemical and Sherwin-Williams”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shin-Etsu Chemical	$17.10 billion	4.33	$3.15 billion	$0.86	21.71
Sherwin-Williams	$23.57 billion	3.61	$2.57 billion	$10.88	32.40

Shin-Etsu Chemical has higher earnings, but lower revenue than Sherwin-Williams. Shin-Etsu Chemical is trading at a lower price-to-earnings ratio than Sherwin-Williams, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Shin-Etsu Chemical and Sherwin-Williams, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shin-Etsu Chemical	0	1	0	0	2.00
Sherwin-Williams	0	12	15	0	2.56

Sherwin-Williams has a consensus target price of $377.29, indicating a potential upside of 7.03%. Given Sherwin-Williams’ stronger consensus rating and higher probable upside, analysts plainly believe Sherwin-Williams is more favorable than Shin-Etsu Chemical.

Volatility and Risk

Shin-Etsu Chemical has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, Sherwin-Williams has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.

Dividends

Shin-Etsu Chemical pays an annual dividend of $0.20 per share and has a dividend yield of 1.1%. Sherwin-Williams pays an annual dividend of $3.20 per share and has a dividend yield of 0.9%. Shin-Etsu Chemical pays out 23.3% of its earnings in the form of a dividend. Sherwin-Williams pays out 29.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sherwin-Williams has increased its dividend for 48 consecutive years. Shin-Etsu Chemical is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Shin-Etsu Chemical and Sherwin-Williams’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shin-Etsu Chemical	18.57%	10.90%	8.97%
Sherwin-Williams	10.74%	69.51%	11.04%

Institutional and Insider Ownership

0.0% of Shin-Etsu Chemical shares are held by institutional investors. Comparatively, 77.7% of Sherwin-Williams shares are held by institutional investors. 0.2% of Sherwin-Williams shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Sherwin-Williams beats Shin-Etsu Chemical on 11 of the 17 factors compared between the two stocks.

About Shin-Etsu Chemical

Shin-Etsu Chemical Co., Ltd. provides infrastructure, electronics, and functional materials in Japan. It is also involved in processing and specialized related services. The company operates through Infrastructure Materials; Electronics Materials; Functional Materials; and Processing and Specialized Services segments. In addition, it offers cellulose derivatives, synthetic pheromones, aroma chemicals, dielectric and LED/ semiconductor materials, silanes, photoresists, chlorides, caustic soda, liquid fluoroelastomers, polyvinyl chloride and vinyl acetate resin, silicones, and silicones processed goods. Further, the company offers pellicles, photomask blanks, synthetic quartz/ quartz cloth, pyrolytic boron nitride, LIB anode material, and silicon metal. Additionally, it provides rare earth magnets, compound semiconductors, and oxide single crystals. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. Shin-Etsu Chemical Co., Ltd. was incorporated in 1926 and is headquartered in Tokyo, Japan.

About Sherwin-Williams

The Sherwin-Williams Company engages in the development, manufacture, distribution, and sale of paints, coating, and related products to professional, industrial, commercial, and retail customers. It operates through three segments: Paint Stores Group, Consumer Brands Group, and Performance Coatings Group. The Paint Stores Group segment offers architectural paints and coatings, and protective and marine products, as well as OEM product finishes and related products for architectural and industrial paint contractors, and do-it-yourself homeowners. The Consumer Brands Group segment supplies a portfolio of branded and private-label architectural paints, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks, and adhesives to retailers, including home centers and hardware stores, and dedicated dealers and distributors. The Performance Coatings Group segment develops and sells industrial coatings for wood finishing and general industrial applications, automotive refinish products, protective and marine coatings, coil coatings, packaging coatings, and performance-based resins and colorants. It serves retailers, dealers, jobbers, licensees, and other third-party distributors through its branches and direct sales staff, as well as through outside sales representatives. The company has operations primarily in the North and South America, the Caribbean, Europe, Asia, and Australia. The Sherwin-Williams Company was founded in 1866 and is headquartered in Cleveland, Ohio.