Sherwin-Williams: Brushstrokes of Success - [Business Breakdowns, EP.183]

Today we are breaking down the paint giant Sherwin-Williams. Founded in 1866, Sherwin Williams is a great example of a company where everyday consumers might not appreciate just how great of a business and stock this has been. Over the last 20 years, Sherwin has compounded earnings at 14% per year. And over those 20 years, the stock has returned 26x your investment. And that's compared to the S&P at 5x your investment. This has been an incredible quiet compounder. My guest today is Todd Basnight , director of equity research at Aureus Asset Management. We discuss the business’s vertically integrated model, the focus on a particular customer base, a management team that's been thoughtful about capital allocation, and some of its big deals historically. Please enjoy this Breakdown on Sherwin-Williams. Business Breakdowns on AutoZone . Register for the Business Breakdowns x Founders Conference. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Ridgeline . Ridgeline has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. I think this platform will become the standard for investment managers, and if you run an investing firm, I highly recommend you find time to speak with them. Head to ridgelineapps.com to learn more about the platform. --- This episode is brought to you by Public : Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at https://public.com/businessbreakdowns . ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes . Editing and post-production work for this episode was provided by The Podcast Consultant ( https://thepodcastconsultant.com ). Show Notes (00:00:00) Welcome to Business Breakdowns (00:04:36) Sherwin Williams' Business Model and History (00:08:46) The Paint Stores Group: Sherwin Williams' Crown Jewel (00:14:37) Professional Painters vs. DIY: Market Dynamics (00:19:43) Sherwin Williams' Controlled Distribution Model (00:28:24) The Valspar Acquisition and Consumer Brands (00:32:52) Exploring the Industrial Coatings Market (00:36:43) Sherwin's Performance in the Automotive Market (00:38:03) Sherwin's Growth and Market Share (00:39:32) Financial Overview and Store Economics (00:41:17) Sherwin's Competitive Edge and Market Dynamics (00:50:59) Capital Intensity and Free Cash Flow (01:00:00) Risks and Management Changes (01:04:24) Lessons from Sherwin-Williams