Sherwin-Williams Co., FCFE calculation

US$ in thousands

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	2,681,400)	2,388,800)	2,020,100)	1,864,400)	2,030,400)
Net noncash charges	535,700)	565,900)	612,300)	678,900)	780,800)
Change in working capital accounts	(63,900)	567,200)	(712,500)	(298,700)	597,400)
Net operating cash	3,153,200)	3,521,900)	1,919,900)	2,244,600)	3,408,600)
Capital expenditures	(1,070,000)	(888,400)	(644,500)	(372,000)	(303,800)
Net increase (decrease) in short-term borrowings	288,600)	(603,900)	214,400)	763,900)	(204,600)
Proceeds from long-term debt	848,700)	—)	999,700)	994,800)	999,000)
Payments of long-term debt	(1,100,000)	(136,400)	(260,300)	(422,900)	(1,204,700)
Payments for credit facility and debt issuance costs	(8,600)	—)	(7,300)	(11,500)	(10,000)
Free cash flow to equity (FCFE)	2,111,900)	1,893,200)	2,221,900)	3,196,900)	2,684,500)

Based on: 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), 10-K (reporting date: 2020-12-31).

Net Operating Cash: The net operating cash shows a fluctuating trend over the five-year period. It declined notably from 3,408,600 thousand US$ in 2020 to 2,244,600 thousand US$ in 2021, followed by a further decrease to 1,919,900 thousand US$ in 2022. However, a significant recovery is observed in 2023, with net operating cash rising sharply to 3,521,900 thousand US$, before slightly decreasing to 3,153,200 thousand US$ in 2024. Overall, net operating cash demonstrates volatility but recovers strongly after two years of decline, reaching levels close to the initial 2020 figure by 2024.
Free Cash Flow to Equity (FCFE): Free cash flow to equity experienced a different pattern compared to net operating cash. It started at 2,684,500 thousand US$ in 2020 and increased to a peak of 3,196,900 thousand US$ in 2021. This was followed by a substantial decline to 2,221,900 thousand US$ in 2022. The downward trend continued into 2023, reaching 1,893,200 thousand US$, the lowest point in the observed period. Nevertheless, a modest recovery occurred in 2024, with FCFE rising to 2,111,900 thousand US$. Despite some recovery, FCFE in 2024 remains below the initial value in 2020 and significantly lower than its peak in 2021.
Overall Analysis: Both net operating cash and FCFE show considerable variability throughout the period analyzed. Net operating cash exhibits a sharp dip in 2021 and 2022 with a strong rebound in 2023, suggesting possible operational challenges during those two years but a substantial improvement subsequently. Conversely, FCFE peaked in 2021 but then steadily declined through 2023, with only a slight rebound in 2024, indicating possible pressures on the cash available to equity holders post-2021. The divergence in the paths of net operating cash and FCFE, especially the more marked recovery in net operating cash, could imply changes in investment or financing activities affecting free cash flow differently than operating cash.

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

No. shares of common stock outstanding	249,333,316
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)	2,111,900)
FCFE per share	8.47
Current share price (P)	372.93
Valuation Ratio
P/FCFE	44.03
Benchmarks
P/FCFE, Competitors¹
Linde plc	27.91
P/FCFE, Sector
Chemicals	31.24
P/FCFE, Industry
Materials	31.55

Based on: 10-K (reporting date: 2024-12-31).

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, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
No. shares of common stock outstanding¹	251,364,135	254,464,522	258,442,281	260,373,774	268,805,607
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)²	2,111,900)	1,893,200)	2,221,900)	3,196,900)	2,684,500)
FCFE per share³	8.40	7.44	8.60	12.28	9.99
Share price^1, 4	350.02	311.26	222.63	267.22	238.97
Valuation Ratio
P/FCFE⁵	41.66	41.84	25.90	21.76	23.93
Benchmarks
P/FCFE, Competitors⁶
Linde plc	26.97	33.03	16.87	24.31	24.61
P/FCFE, Sector
Chemicals	30.01	35.00	18.49	23.44	24.38
P/FCFE, Industry
Materials	30.06	45.58	18.95	19.23	27.42

Based on: 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), 10-K (reporting date: 2020-12-31).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2024 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 2,111,900,000 ÷ 251,364,135 = 8.40

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

⁵ 2024 Calculation
P/FCFE = Share price ÷ FCFE per share
= 350.02 ÷ 8.40 = 41.66

⁶ Click competitor name to see calculations.

Share Price Trend: The share price exhibited a general upward trend over the five-year period. Starting at $238.97 in 2020, it increased moderately to $267.22 in 2021, followed by a decline to $222.63 in 2022. Subsequently, the price rebounded significantly to $311.26 in 2023 and continued to rise to $350.02 by the end of 2024.
Free Cash Flow to Equity (FCFE) per Share: FCFE per share showed variability across the years. It rose from $9.99 in 2020 to a peak of $12.28 in 2021, then decreased notably to $8.60 in 2022. In the following years, FCFE per share further declined to $7.44 in 2023 before showing a slight recovery to $8.40 in 2024.
Price to FCFE Ratio (P/FCFE): The P/FCFE ratio remained relatively stable during the first two years, starting at 23.93 in 2020 and decreasing slightly to 21.76 in 2021. From 2022 onwards, there was a marked increase, with the ratio rising to 25.90 in 2022 and then sharply to 41.84 in 2023. It held steady at a high level of 41.66 in 2024, indicating significantly higher market valuation relative to free cash flow.
Overall Analysis: The data reveals a contrasting dynamic between market valuation and underlying cash flow generation. While the share price demonstrated strong growth toward the end of the period, FCFE per share declined after 2021 before a modest improvement in 2024. The substantial increase in the P/FCFE ratio since 2022 suggests that the market's valuation of the shares has outpaced the growth or recovery in free cash flow to equity, potentially reflecting elevated investor expectations or changing market sentiment.

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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