Home Depot vs Sherwin-Williams Which Outperforms?

Home Depot and Sherwin-Williams are both well-known companies in the home improvement and paint industries, respectively. Home Depot is a leading retailer of home improvement products, while Sherwin-Williams specializes in the production and sale of paint and related products. Both companies have experienced steady growth in their stock prices over the years, but Home Depot has historically outperformed Sherwin-Williams in terms of stock performance. Investors looking to invest in the home improvement sector may find these two stocks an interesting comparison.

Home Depot or Sherwin-Williams?

When comparing Home Depot and Sherwin-Williams, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Home Depot and Sherwin-Williams.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Home Depot has a dividend yield of 2.17%, while Sherwin-Williams has a dividend yield of 0.78%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Home Depot reports a 5-year dividend growth of 15.20% year and a payout ratio of 60.05%. On the other hand, Sherwin-Williams reports a 5-year dividend growth of -6.79% year and a payout ratio of 27.33%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Home Depot P/E ratio at 28.11 and Sherwin-Williams's P/E ratio at 35.95. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Home Depot P/B ratio is 70.98 while Sherwin-Williams's P/B ratio is 22.12.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Home Depot has seen a 5-year revenue growth of 0.61%, while Sherwin-Williams's is 0.44%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Home Depot's ROE at 447.13% and Sherwin-Williams's ROE at 67.63%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $413.18 for Home Depot and $366.33 for Sherwin-Williams. Over the past year, Home Depot's prices ranged from $323.77 to $439.37, with a yearly change of 35.70%. Sherwin-Williams's prices fluctuated between $282.09 and $400.42, with a yearly change of 41.95%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.