Reviewing Sherwin-Williams (NYSE:SHW) and Westaim (OTCMKTS:WEDXF)

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

Insider and Institutional Ownership

77.7% of Sherwin-Williams shares are held by institutional investors. 4.2% of Westaim shares are held by company insiders. Comparatively, 0.2% of Sherwin-Williams shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Westaim	-108.56%	-9.48%	-7.73%
Sherwin-Williams	10.86%	64.55%	11.10%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westaim	$53.37 million	10.78	-$38.00 million	($1.92)	-8.97
Sherwin-Williams	$23.57 billion	3.24	$2.57 billion	$10.42	29.72

Sherwin-Williams has higher revenue and earnings than Westaim. Westaim 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 recent ratings for Westaim and Sherwin-Williams, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westaim	0	0	0	0	0.00
Sherwin-Williams	0	5	9	0	2.64

Sherwin-Williams has a consensus target price of $375.33, indicating a potential upside of 21.19%. Given Sherwin-Williams’ stronger consensus rating and higher probable upside, analysts clearly believe Sherwin-Williams is more favorable than Westaim.

Risk and Volatility

Westaim has a beta of 0.18, meaning that its stock price is 82% less volatile than the S&P 500. Comparatively, Sherwin-Williams has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.

Summary

Sherwin-Williams beats Westaim on 12 of the 14 factors compared between the two stocks.

About Westaim

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.

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.