It is a dividend aristocrat as well as a major component of the S&P 500 index. Over the past 10 years this dividend growth stock has delivered an annual average total return of 12.10 % to its shareholders. The company has managed to deliver an impressive 12% average annual increase in its EPS through organic growth and share buybacks. Management has consistently bought back 4.90% of outstanding shares each year for the past 10 years. Without the buybacks the growth in EPS would have been 6.90% annually.
Annual dividend payments have increased over the past 10 years by an average of 12.4% annually, which matches the growth in EPS. A 12% growth in dividends translates into the dividend payment doubling every 6 years. If we look at historical data, going as far back as 1985, SHW has actually managed to double its dividends every six years.
If we invested $100,000 in SHW on December 31, 1997 we would have bought 3757 shares. Your quarterly dividend income would have been $420.78 in February 1998. If you kept reinvesting the dividends though instead of spending them, your quarterly dividend payment would have risen to $1438.92 by November 2007 and $1606.85 in February 2008. For a period of 10 years, your quarterly dividend income has increased by 212 %. If you reinvested it though, your quarterly dividend income would have increased by 282%.
The dividend payout has consistently remained under 35% over the past 10 years. This is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.
I believe that SHW is attractively priced at the moment with its low price/earnings multiple of 11.10 and above-average yield at 2.70%.