Sherwin-Williams Hikes Quarterly Dividend By 23.1%; Street Is Bullish

Sherwin-Williams raised its quarterly dividend by 23.1% to $1.65 per share. This marks the Ohio-based paint and coating manufacturer’s 43rd consecutive year of regular dividend increases.

Sherwin-Williams (SHW) said that the new dividend will be paid on March 12, to shareholders of record as of March 1. Shares closed at $721.40 on Feb. 17, up almost 2%.

The company’s annual dividend of $6.60 per share now reflects a dividend yield of 0.91%.

The company also announced the repurchase of an additional 15 million shares. As of Dec. 31, 2020, Sherwin-Williams had 4.55 million shares remaining under its existing share repurchase program. (See Sherwin-Williams stock analysis on TipRanks)

On Feb. 3, the company introduced a three-for-one stock split. Therefore, adjusting the total amount authorized proportionately, there will be three times the shares authorized for repurchase after the stock split.

On Jan. 29, RBC Capital analyst Arun Viswanathan increased the stock’s price target to $806 (11.7% upside potential) from $765 and maintained a Buy rating following the company’s “Q4 earnings beat.”

Viswanathan views, “the company’s positioning heading into FY21 given the continued robust demand in DIY, its ability to offset cost inflation with higher prices, and the eventual recoveries in businesses tied to re-openings such as industrial, P&M, refinish, and interior paints,” as encouraging.

The consensus rating among analysts is a Strong Buy based on 4 Buys and 1 Hold. The average analyst price target stands at $808 and implies upside potential of 12% to current levels over the next 12 months. Shares have increased 24.3% over the past year.

Sherwin-Williams scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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