Reviewing Sherwin-Williams (NYSE:SHW) & Elementis (OTCMKTS:ELMTY)

Sherwin-Williams (NYSE:SHW) and Elementis (OTCMKTS:ELMTY) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Dividends

Sherwin-Williams pays an annual dividend of $3.16 per share and has a dividend yield of 0.9%. Elementis pays an annual dividend of $0.08 per share and has a dividend yield of 0.9%. Sherwin-Williams pays out 30.8% of its earnings in the form of a dividend. Sherwin-Williams has increased its dividend for 48 consecutive years. Sherwin-Williams is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Sherwin-Williams and Elementis”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sherwin-Williams	$23.28 billion	3.69	$2.68 billion	$10.25	33.64
Elementis	$738.30 million	1.74	-$47.80 million	N/A	N/A

Sherwin-Williams has higher revenue and earnings than Elementis.

Analyst Recommendations

This is a summary of current ratings for Sherwin-Williams and Elementis, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sherwin-Williams	0	4	11	1	2.81
Elementis	0	0	0	0	0.00

Sherwin-Williams presently has a consensus target price of $390.87, suggesting a potential upside of 13.34%. Given Sherwin-Williams’ stronger consensus rating and higher possible upside, research analysts plainly believe Sherwin-Williams is more favorable than Elementis.

Profitability

This table compares Sherwin-Williams and Elementis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sherwin-Williams	11.05%	66.75%	11.37%
Elementis	N/A	N/A	N/A

Risk & Volatility

Sherwin-Williams has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, Elementis has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500.

Insider & Institutional Ownership

77.7% of Sherwin-Williams shares are held by institutional investors. 0.6% of Sherwin-Williams shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Sherwin-Williams beats Elementis on 15 of the 16 factors compared between the two stocks.

About Sherwin-Williams

The Sherwin-Williams Company engages in the development, manufacture, distribution, and sale of paints, coating, and related products to professional, industrial, commercial, and retail customers. It operates through three segments: Paint Stores Group, Consumer Brands Group, and Performance Coatings Group. The Paint Stores Group segment offers architectural paints and coatings, and protective and marine products, as well as OEM product finishes and related products for architectural and industrial paint contractors, and do-it-yourself homeowners. The Consumer Brands Group segment supplies a portfolio of branded and private-label architectural paints, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks, and adhesives to retailers, including home centers and hardware stores, and dedicated dealers and distributors. The Performance Coatings Group segment develops and sells industrial coatings for wood finishing and general industrial applications, automotive refinish products, protective and marine coatings, coil coatings, packaging coatings, and performance-based resins and colorants. It serves retailers, dealers, jobbers, licensees, and other third-party distributors through its branches and direct sales staff, as well as through outside sales representatives. The company has operations primarily in the North and South America, the Caribbean, Europe, Asia, and Australia. The Sherwin-Williams Company was founded in 1866 and is headquartered in Cleveland, Ohio.

About Elementis

Elementis plc operates as a specialty chemical company in the United Kingdom, rest of Europe, North America, and internationally. It operates in two segments, Performance Specialties and Personal Care. The Performance Specialties segment engages in the production of rheological modifiers and additives for decorative and industrial coatings; and production and supply of talc for use in plastics, coatings, technical ceramics, and paper sectors. The Personal Care segment provides rheological modifiers and compounded products, including active ingredients for antiperspirants (AP) deodorants for personal care manufacturers. The company offers personal care products for antiperspirants, color cosmetics, and skin care applications; and performance specialties products for architectural coatings, adhesives, sealants and construction additives, and talc applications. Elementis plc was founded in 1844 and is headquartered in London, the United Kingdom.