Sherwin-Williams Co., FCFE calculation

US$ in thousands

12 months ended:	Dec 31, 2025	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Net income	2,568,500)	2,681,400)	2,388,800)	2,020,100)	1,864,400)
Net noncash charges	1,090,500)	535,700)	508,900)	612,300)	678,900)
Change in working capital accounts	(207,400)	(63,900)	624,200)	(712,500)	(298,700)
Net operating cash	3,451,600)	3,153,200)	3,521,900)	1,919,900)	2,244,600)
Capital expenditures	(797,600)	(1,070,000)	(888,400)	(644,500)	(372,000)
Net increase (decrease) in short-term borrowings	537,400)	288,600)	(603,900)	214,400)	763,900)
Proceeds from long-term debt	1,499,200)	848,700)	—)	999,700)	994,800)
Payments of long-term debt	(1,050,000)	(1,100,000)	(136,400)	(260,300)	(422,900)
Payments for credit facility and debt issuance costs	(13,500)	(8,600)	—)	(7,300)	(11,500)
Free cash flow to equity (FCFE)	3,627,100)	2,111,900)	1,893,200)	2,221,900)	3,196,900)

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

The financial information reveals fluctuating trends in both net operating cash flow and free cash flow to equity (FCFE) over the five-year period. Net operating cash flow experienced a decrease from 2021 to 2022, followed by a substantial increase in 2023, and then a slight decline in 2024 before recovering in 2025. FCFE demonstrates a more pronounced volatility, with a significant decrease from 2021 to 2023, a modest recovery in 2024, and a substantial increase in 2025.

Net Operating Cash Flow: Net operating cash flow began at US$2,244.6 million in 2021, decreased to US$1,919.9 million in 2022, then rose significantly to US$3,521.9 million in 2023. A subsequent decrease to US$3,153.2 million occurred in 2024, followed by an increase to US$3,451.6 million in 2025. This indicates a period of instability followed by a return to growth.
Free Cash Flow to Equity (FCFE): FCFE started at US$3,196.9 million in 2021, declining to US$2,221.9 million in 2022 and further to US$1,893.2 million in 2023. A slight recovery was observed in 2024, with FCFE reaching US$2,111.9 million. The most significant change occurred in 2025, with FCFE increasing substantially to US$3,627.1 million. This suggests potential shifts in capital structure or dividend policies impacting cash available to equity holders.

The divergence between net operating cash flow and FCFE suggests that factors beyond core operations, such as financing activities or investment decisions, are significantly influencing the cash available to equity holders. The substantial increase in FCFE in 2025, exceeding the initial 2021 level, warrants further investigation to determine the underlying drivers of this improvement.

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Sherwin-Williams Co., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	247,774,767
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)	3,627,100)
FCFE per share	14.64
Current share price (P)	313.70
Valuation Ratio
P/FCFE	21.43
Benchmarks
P/FCFE, Competitors¹
Linde plc	27.79
P/FCFE, Sector
Chemicals	25.81
P/FCFE, Industry
Materials	28.97

Based on: 10-K (reporting date: 2025-12-31).

¹ Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

Sherwin-Williams Co., historical P/FCFE calculation, comparison to benchmarks

	Dec 31, 2025	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
No. shares of common stock outstanding¹	247,774,767	251,364,135	254,464,522	258,442,281	260,373,774
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)²	3,627,100)	2,111,900)	1,893,200)	2,221,900)	3,196,900)
FCFE per share³	14.64	8.40	7.44	8.60	12.28
Share price^1, 4	357.61	350.02	311.26	222.63	267.22
Valuation Ratio
P/FCFE⁵	24.43	41.66	41.84	25.90	21.76
Benchmarks
P/FCFE, Competitors⁶
Linde plc	29.44	26.97	33.03	16.87	24.31
P/FCFE, Sector
Chemicals	27.88	30.01	35.00	18.49	23.44
P/FCFE, Industry
Materials	31.49	30.06	45.58	18.95	19.23

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2025 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 3,627,100,000 ÷ 247,774,767 = 14.64

⁴ Closing price as at the filing date of Sherwin-Williams Co. Annual Report.

⁵ 2025 Calculation
P/FCFE = Share price ÷ FCFE per share
= 357.61 ÷ 14.64 = 24.43

⁶ Click competitor name to see calculations.

The Price to Free Cash Flow to Equity (P/FCFE) ratio exhibited considerable fluctuation over the five-year period. Initial values decreased from 2021 to 2022, followed by a substantial increase, and then a return towards lower levels by 2025. This suggests evolving investor sentiment and/or changes in the company’s financial performance as perceived by the market.

Share Price: The share price demonstrated a decline from US$267.22 in 2021 to US$222.63 in 2022. A subsequent recovery was observed, with the price reaching US$311.26 in 2023 and further increasing to US$350.02 in 2024. The price experienced a modest increase to US$357.61 in 2025, indicating a stabilization after the prior gains.
FCFE per Share: FCFE per share decreased from US$12.28 in 2021 to US$8.60 in 2022. This downward trend continued to US$7.44 in 2023, representing the lowest value within the observed period. A partial recovery occurred in 2024, with FCFE per share rising to US$8.40. A significant increase was then noted in 2025, reaching US$14.64, exceeding the 2021 level.
P/FCFE Ratio: The P/FCFE ratio began at 21.76 in 2021 and increased to 25.90 in 2022. A marked increase was then observed, with the ratio reaching 41.84 in 2023 and remaining high at 41.66 in 2024. By 2025, the P/FCFE ratio decreased substantially to 24.43, approaching the level seen in 2022. This movement suggests that the market valuation relative to the free cash flow available to equity holders changed considerably, potentially reflecting shifts in growth expectations or risk assessment.

The divergence between the share price and FCFE per share trends is notable. While the share price generally increased from 2022 to 2025, the FCFE per share experienced a more volatile pattern, with a significant increase only occurring in the final year. The P/FCFE ratio’s peak in 2023 and 2024, coupled with the subsequent decline, indicates a potential correction in market valuation as FCFE per share improved.

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Sherwin-Williams Co. (NYSE:SHW)

Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)

Price to FCFE Ratio, Current

Price to FCFE Ratio, Historical