Axalta Coating Systems (NYSE: AXTA) and Sherwin-Williams (NYSE:SHW) are both mid-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, earnings, risk, dividends, profitability and analyst recommendations.
Volatility & Risk
Axalta Coating Systems has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500. Comparatively, Sherwin-Williams has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.
This is a summary of current ratings for Axalta Coating Systems and Sherwin-Williams, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Axalta Coating Systems||1||6||8||0||2.47|
Axalta Coating Systems currently has a consensus target price of $33.50, suggesting a potential upside of 3.55%. Sherwin-Williams has a consensus target price of $410.20, suggesting a potential upside of 2.25%. Given Axalta Coating Systems’ higher possible upside, equities analysts clearly believe Axalta Coating Systems is more favorable than Sherwin-Williams.
Sherwin-Williams pays an annual dividend of $3.40 per share and has a dividend yield of 0.8%. Axalta Coating Systems does not pay a dividend. Sherwin-Williams pays out 29.9% of its earnings in the form of a dividend. Sherwin-Williams has increased its dividend for 38 consecutive years.
Earnings and Valuation
This table compares Axalta Coating Systems and Sherwin-Williams’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Axalta Coating Systems||$4.07 billion||1.93||$41.80 million||$0.24||134.80|
|Sherwin-Williams||$11.86 billion||3.16||$1.13 billion||$11.37||35.28|
Sherwin-Williams has higher revenue and earnings than Axalta Coating Systems. Sherwin-Williams is trading at a lower price-to-earnings ratio than Axalta Coating Systems, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
99.3% of Axalta Coating Systems shares are owned by institutional investors. Comparatively, 76.0% of Sherwin-Williams shares are owned by institutional investors. 2.3% of Axalta Coating Systems shares are owned by company insiders. Comparatively, 1.7% of Sherwin-Williams shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares Axalta Coating Systems and Sherwin-Williams’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Axalta Coating Systems||1.46%||19.91%||4.30%|
Sherwin-Williams beats Axalta Coating Systems on 12 of the 17 factors compared between the two stocks.
About Axalta Coating Systems
Axalta Coating Systems Ltd. is a holding company. The Company is a manufacturer, marketer and distributor of coatings systems primarily serving the transportation industry. The Company’s segments include Performance Coatings and Transportation Coatings. Through its Performance Coatings segment, the Company provides liquid and powder coatings solutions to a fragmented and local customer base. Through its Transportation Coatings segment, the Company provides coating technologies to original equipment manufacturers (OEMs) of light and commercial vehicles. The Performance Coatings segment serves various end markets, including refinish and industrial. The Company develops, markets and supplies a portfolio of coatings systems and color matching technologies. The Company also develops and supplies an array of coatings systems for a range of commercial applications, including heavy-duty truck (HDT), bus, rail and agricultural construction equipment (ACE).
The Sherwin-Williams Company (Sherwin-Williams) is engaged in the development, manufacture, distribution and sale of paint, coatings and related products. The Company’s segments are Paint Stores Group, Consumer Group, Global Finishes Group, Latin America Coatings Group and Administrative. The Paint Stores Group markets and sells Sherwin-Williams branded architectural paint and coatings, protective and marine products, original equipment manufacturer (OEM) product finishes and related items. The Consumer Group segment manufactures and distributes a range of paint, coatings and related products. The Global Finishes Group develops, licenses and manufactures a range of protective and marine products, automotive finishes and refinish products, OEM product finishes and related products. The Latin America Coatings Group develops, licenses, manufactures and distributes a range of architectural paint and coatings, protective and marine products, OEM product finishes and related products.
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