Sherwin-Williams isn't just a house paint company. Even if it was, though, it would be more resilient than you might imagine.
Not every company can thrive in -- or even survive -- a wobbly economy.
There are plenty of stocks worthy of consideration right now, particularly in light of this year's sizable sell-off. In some ways, though, the weakness has distinguished the resilient winners from the marginal, vulnerable players -- not every name out there can truly be considered "unstoppable."
With this market backdrop, here's a closer look at three investments that would be at home in almost anyone's portfolio. Not all of them are high-growth companies, but all three of them are built to thrive in any environment.
You likely know it as a brand of paint and a chain of paint stores, but that's not all The Sherwin-Williams Company (SHW 0.68%) is. The company also manages an industrial coatings business serving industries ranging from automotive to energy to aerospace to packaging and more. Many of its customers need these goods regardless of the economy's condition, and regardless of these goods' cost.
In the meantime, there's always a respectable market for architectural (home and building) paint.
The homebuilding boom between 2011 and early this year coincides with comparably paced revenue growth for this popular paint brand. Indeed, the only quarter in which sales fell year-over-year within the past decade was the second quarter of 2020, when the COVID-19 pandemic shut down all non-essential consumption. Once that dust settled and stores could reopen, people began improving the homes they were suddenly spending so much time in.
It's a testament to just how marketable architectural paint is. Not only is painting one of the most cost-effective ways of making worn-out walls look new again, it's also one of only a handful of DIY projects most homeowners feel confident enough to take on themselves. Underscoring this idea is how well the company held up even in the wake of 2007's subprime mortgage meltdown, which pushed the U.S. economy into a full-blow recession by 2008. Its 2009 revenue slumped 11% from 2008's stagnant top line, but by 2010, the company was on the mend. By 2011, Sherwin-Williams' sales were back into record-breaking territory, up nearly 10% from 2007's peak.
It remains to be seen just how much the current housing headwind might crimp demand for paint. If the company can recover so well from 2008's devastation, though, it should be able to push through whatever's coming this time around. To this end, the analyst community is calling for sales growth next year despite expectations for economic weakness (if not a full-blown recession) with per-share profits projected to soar to the tune of 18%.