Sherwin-Williams vs Home Depot Which Is More Promising?

Sherwin-Williams and Home Depot are two leading companies in the home improvement industry, with both stocks being popular choices among investors. Sherwin-Williams is a global leader in paint and coatings, while Home Depot is a retail giant specializing in home improvement products. Both companies have experienced significant growth in recent years, but their stocks have shown varying performance. Investors looking to capitalize on the home improvement industry may find it beneficial to compare the performance of Sherwin-Williams and Home Depot stocks.

Sherwin-Williams or Home Depot?

When comparing Sherwin-Williams and Home Depot, 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 Sherwin-Williams and Home Depot.

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. Sherwin-Williams has a dividend yield of 0.78%, while Home Depot has a dividend yield of 2.17%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Sherwin-Williams reports a 5-year dividend growth of -6.79% year and a payout ratio of 27.33%. On the other hand, Home Depot reports a 5-year dividend growth of 15.20% year and a payout ratio of 60.05%.

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 Sherwin-Williams P/E ratio at 35.95 and Home Depot's P/E ratio at 28.11. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Sherwin-Williams P/B ratio is 22.12 while Home Depot's P/B ratio is 70.98.

Growth Investors:

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

Retail Investors:

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