SHERWIN WILLIAMS CO

Where It Passes

Where It Falls Short

• Debt & Leverage0% pass✗ 15▾

  All 12 investors flag SHW's debt & leverage

  LT Debt vs Net Current AssetsLT Debt $7.9B vs NCA $-2.8B

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 2.37, IC: 7.5x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity2.37

  ✗Lynch< 0.33

  Cash - Long-term Debt$-7.7B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change34.60% -> 35.98%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.71

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity2.37

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels2.37

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=9.4x, D/EBITDA=N/A (D&A unavailable)

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity2.37

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-2.3742; #3853/4210 (top 91.5%)

  ✗AsnessTop 30% of eligible cross-section
• Valuation0% pass✓ 1✗ 27▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Price / 3-yr avg EPS34.9x

  ✗Graham<= 15x

  Price-to-Book Ratio18.8x

  ✗Graham<= 1.5x

  P/E x P/B658.10

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value4.3%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=4.3%, ROC=152.8%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS34.1x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)25.1x

  ✗Dreman< 8x

  Price / Book Value per Share18.8x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=34.1x

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=34.1x, FCF Yield=3.1%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=34.1x, P/B=18.8x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-132.8% (IV=$150.30 vs Price=$349.89)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share32.7x

  ✗Ackman<= 25

  Price vs. Trailing Low109% of trailing low ($320.55)

  ✓Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+3.17%; #2318/6340 (top 36.6%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.0470; #5017/6449 (top 77.8%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS34.1x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per ShareN/A (non-positive TBVPS)

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.2947; #3351/5247 (top 63.9%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+3.64%; #1896/4519 (top 42.0%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+8.79%; #1924/6202 (top 31.0%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation models0% pass✗ 7▾

  SHW overvalued: all 7 models price fair value below $349.89 (median $134.28)

  Graham fair value$65.46

  ✗Graham-434.5% margin vs $349.89

  Greenblatt fair value$124.41

  ✗Greenblatt-181.2% margin vs $349.89

  Dreman fair value$150.30

  ✗Dreman-132.8% margin vs $349.89

  Munger fair value$127.94

  ✗Munger-173.5% margin vs $349.89

  Akre fair value$199.97

  ✗Akre-75.0% margin vs $349.89

  Ackman fair value$147.15

  ✗Ackman-137.8% margin vs $349.89

  Templeton fair value$134.28

  ✗Templeton-160.6% margin vs $349.89
• Growth13% pass✓ 1✗ 12▾

  7 of 8 flag SHW's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 11.9% vs Rev: 7.0%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency27/27 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth2.1%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trend

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR5.1%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Verdicts14% pass✓ 2✗ 12▾

  Split decision: 12 FAIL · 3 NEUTRAL · 1 PASS

  Overall verdict

  ✗GrahamFAIL (2/9)✓BuffettPASS (5/9)✗LynchFAIL (2/7)✓GreenblattRank #551•PiotroskiNEUTRAL (F-Score 6)✗DremanFAIL (3/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (2/6)✗MarksFAIL (2/5)✗AckmanFAIL (3/9)✗TempletonFAIL (3/8)•SleepNEUTRAL (4/6)✗AsnessFAIL (Rank #1163/2370 (Top 49.1%))✗NeffFAIL (3/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)
• Profitability19% pass✓ 16✗ 19▾

  13 of 16 flag SHW's profitability — Graham, Buffett, Lynch +10 more

  Positive EPS (10 years)18/27 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)27/27 years positive

  ✓BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)65.6%

  ✓Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)18.1% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE67.3%

  ✓Lynch> 15%

  EBIT / Enterprise Value4.3%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=4.3%, ROC=152.8%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets9.92%

  ✓PiotroskiROA > 0

  ROA Change YoY11.35% -> 9.92% (delta: -1.43%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=13.33%, ROA=9.92%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY48.5% -> 48.8%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue14.0%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity67.3%

  ✓Dreman> 12%

  Margin of SafetyP/E=34.1x, P/B=18.8x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity62.1% (3-yr avg)

  ✓AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-132.8% (IV=$150.30 vs Price=$349.89)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency27/27 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue

  ✗Ackman>= 15%

  Net Income / Shareholders Equity67.3%

  ✓Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trend

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+3.17%; #2318/6340 (top 36.6%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+44.91%; #804/3702 (top 21.7%)

  ✓AsnessTop 30% of eligible cross-section

  Net income / positive book equity+67.29%; #148/5226 (top 2.8%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0090; #760/5884 (top 12.9%)

  ✓AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years10/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Efficiency38% pass✓ 5✗ 6▾

  5 of 8 flag SHW's efficiency — Graham, Piotroski, Dreman +2 more

  Current Ratio0.71

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)21.9%

  ✓Buffett> 10%

  ROIC - WACC+11.9%

  ✓BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)152.8%

  ✓Greenblatt> 25%

  Current Ratio Change YoY0.79 -> 0.87

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.98x -> 0.91x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities0.71

  ✗Dreman> 1.5

  Return on Invested Capital

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=24.9%; FY2024: ROIC=unavailable; FY2025: ROIC=unavailable

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)3/3 years above 12% (latest 24.9%)

  ✓SleepROIC > 12% in a majority of years
• Cash Flow50% pass✓ 6✗ 6▾

  5 of 10 pass — Buffett, Dreman, Pabrai +2 more object

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  FCF Positive and Growing$3.1B

  ✓LynchPositive and growing

  Operating Cash Flow$3.5B

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=13.33%, ROA=9.92%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)25.1x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=34.1x, FCF Yield=3.1%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive18/18 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap3.6%

  ✗Ackman>= 4%

  Price / FCF per Share32.7x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency18/18 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$3.1B

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+3.64%; #1896/4519 (top 42.0%)

  ✗OshaughnessyTop 10% of eligible cross-section