Topics Value Stocks

Sherwil-Williams Co. $312 - New York symbol SHW

SHERWIN-WILLIAMS CO. $312 (New York symbol SHW; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 92.5 million; Market cap: $28.9 billion; Price-to-sales ratio: 2.5; Dividend yield: 1.1%; TSINetwork Rating: Above Average; www.sherwin-williams.com) recently agreed to acquire rival paint maker Valspar Corp. (New York symbol VAL). The combined company would be the world’s largest paint maker, with annual sales of $15.6 billion.

Sherwin is paying $9.3 billion in cash. If you include Valpar’s debt, the price rises to $11.3 billion.

Valspar’s shareholders recently approved the takeover. The deal still needs regulatory approvals, but Sherwin expects to complete the purchase by March 31, 2017.

Big acquisitions like this add risk. Also, the company will have to borrow the cash it needs for this purchase. That will push up its debt to around $13 billion, or a high 45% of its market cap.

Sherwin-Williams is a hold.

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Pat McKeough

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Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

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Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.