Comparing FUCHS (OTCMKTS:FUPBY) and Sherwin-Williams (NYSE:SHW)

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

Risk and Volatility

FUCHS has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, Sherwin-Williams has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Dividends

FUCHS pays an annual dividend of $0.17 per share and has a dividend yield of 1.4%. Sherwin-Williams pays an annual dividend of $3.16 per share and has a dividend yield of 0.9%. FUCHS pays out 27.9% of its earnings in the form of a dividend. Sherwin-Williams pays out 31.3% 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. FUCHS is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FUCHS	$3.81 billion	1.73	$326.79 million	$0.61	19.43
Sherwin-Williams	$23.10 billion	3.95	$2.68 billion	$10.08	36.28

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

Insider and Institutional Ownership

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

Analyst Recommendations

This is a summary of recent ratings and price targets for FUCHS and Sherwin-Williams, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FUCHS	1	0	0	0	1.00
Sherwin-Williams	0	6	10	1	2.71

Sherwin-Williams has a consensus target price of $388.60, indicating a potential upside of 6.25%. Given Sherwin-Williams’ stronger consensus rating and higher possible upside, analysts clearly believe Sherwin-Williams is more favorable than FUCHS.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FUCHS	8.16%	15.56%	11.09%
Sherwin-Williams	11.03%	66.91%	11.48%

Summary

Sherwin-Williams beats FUCHS on 16 of the 18 factors compared between the two stocks.

About FUCHS

Fuchs SE develops, produces, and sells lubricants and related specialties in Europe, the Middle East, Africa, the Asia Pacific, and North and South America. The company offers automotive lubricants, such as biodegradable lubricants, central and mobile hydraulic oils, dry coatings, engine and gear oils, motorcycle/two wheelers, and service fluids, as well as various oils for agriculture sector. It also provides industrial lubricants, including chain lubricants, dry coatings, gear and hydraulic oils, machine oils, open gear lubricants, rapidly biodegradable lubricants, compressor and refrigeration oils, release agents, slideways oils, fluids and industrial oils, textile machine oils, and turbine oils. In addition, the company offers lubricating greases comprising assembly pastes, biodegradable greases, food grade greases, multi-purpose/long-life greases, pastes for extreme temperatures, perfluorinated pastes, and wheel bearing greases, as well as gear boxes, and greases for central lubricating system, extreme temperature, machine tools, plain and roller bearings, rail vehicles, spray cans or rattle cans, and solid lubricants. Further, it provides metal processing lubricants consisting of cleaners, corrosion preventives, cutting and grinding, forming lubricants, and quenching oils; and special application lubricants for application equipment, chain lubrication, dry coatings, food and beverage, gears, sugar processing, railway traffic, plain and roller bearings, glass manufacturing process, hot forming, maintenance, open gears, pastes, release agents, other specialties, special greases, and wind power plants. Additionally, the company offers open gear and surface coating services. The company was formerly known as Fuchs Petrolub SE and changed its name to Fuchs SE in July 2023. Fuchs SE was founded in 1931 and is headquartered in Mannheim, Germany.

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.