Comparing Akzo Nobel (OTCMKTS:AKZOY) and Sherwin-Williams (NYSE:SHW)

Sherwin-Williams (NYSE:SHW) and Akzo Nobel (OTCMKTS:AKZOY) are both large-cap materials companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Dividends

Sherwin-Williams pays an annual dividend of $3.20 per share and has a dividend yield of 1.0%. Akzo Nobel pays an annual dividend of $0.99 per share and has a dividend yield of 4.6%. Sherwin-Williams pays out 29.5% of its earnings in the form of a dividend. Akzo Nobel pays out 69.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sherwin-Williams has increased its dividend for 48 consecutive years.

Valuation & Earnings

This table compares Sherwin-Williams and Akzo Nobel”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sherwin-Williams	$23.57 billion	3.29	$2.57 billion	$10.85	29.41
Akzo Nobel	$11.49 billion	0.96	$718.44 million	$1.43	15.07

Sherwin-Williams has higher revenue and earnings than Akzo Nobel. Akzo Nobel is trading at a lower price-to-earnings ratio than Sherwin-Williams, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for Sherwin-Williams and Akzo Nobel, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sherwin-Williams	0	8	9	1	2.61
Akzo Nobel	0	6	2	1	2.44

Sherwin-Williams currently has a consensus target price of $385.88, suggesting a potential upside of 20.92%. Given Sherwin-Williams’ stronger consensus rating and higher possible upside, equities analysts plainly believe Sherwin-Williams is more favorable than Akzo Nobel.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sherwin-Williams	11.01%	67.97%	11.16%
Akzo Nobel	6.49%	12.77%	4.09%

Risk and Volatility

Sherwin-Williams has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Akzo Nobel has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.

Insider and Institutional Ownership

77.7% of Sherwin-Williams shares are held by institutional investors. Comparatively, 0.4% of Akzo Nobel shares are held by institutional investors. 0.2% of Sherwin-Williams shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Sherwin-Williams beats Akzo Nobel on 15 of the 17 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 Akzo Nobel

Akzo Nobel N.V. engages in the production and sale of paints and coatings worldwide. The company operates through two segments: Decorative Paints and Performance Coatings. It offers decorative paints, including paints, lacquers, and varnishes; and a range of mixing machines and color concepts for the building and renovation industry, as well as specialty coatings. The company also provides performance coatings that protect and enhance ships, cars, aircraft, yachts, architectural components, consumer goods, and oil and gas facilities. It offers its products under AkzoNobel, Alabastine, Alba, Andercol, Apla, Armstead Trade, Astral, Astral Batiment, AwlGrip, Brikol, Dulux, Bruguer, Cetabever, Cetol, Chemcraft, Colourland Paints, CONSOLAN, Coral, Cromadex, Cuprinol, Dynacoat, Flexa, Glitsa, Grip-Gard, Herbol, Hammerite, International, Interlux, Innenweis, Interpon, Inca, Luxol, Levis, Lesonal, Molto, Modern Classikk, Maxilite, Mauvilac, Mason CT, Marshall, Mactra, Nordsjo, Oxirite, Protecto, Procolor, Polyfilla, Polycell, Pinotex, Pintuco, Resicoat, Relest, Sparlack, Sadolin, Sikkens, Sea Hawk, Savana, Salcomix, Trimetal, Titanlux, Taubmans, U-tech, Vpowdertech, Vivechrom, Xylazel, Xyladecor, Wanda, and Zweihorn brands. The company serves to energy, packaging, infrastructure, and shipbuilding and maintenance industries, as well as general industries, such as agricultural and construction equipment, construction-related steel, metal fabrication, pipes, appliances, and transportation. The company was formerly known as Akzo NV and changed its name to Akzo Nobel N.V. in 1994. Akzo Nobel N.V. was founded in 1646 and is headquartered in Amsterdam, the Netherlands.