Head-To-Head Analysis: Sherwin-Williams (NYSE:SHW) & 5E Advanced Materials (NASDAQ:FEAM)

Sherwin-Williams (NYSE:SHW) and 5E Advanced Materials (NASDAQ:FEAM) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Volatility & Risk

Sherwin-Williams has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, 5E Advanced Materials has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500.

Insider & Institutional Ownership

77.7% of Sherwin-Williams shares are owned by institutional investors. 0.2% of Sherwin-Williams shares are owned by company insiders. Comparatively, 0.2% of 5E Advanced Materials shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Sherwin-Williams and 5E Advanced Materials, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sherwin-Williams	0	4	10	0	2.71
5E Advanced Materials	1	1	2	0	2.25

Sherwin-Williams currently has a consensus target price of $375.33, indicating a potential upside of 18.58%. 5E Advanced Materials has a consensus target price of $6.38, indicating a potential upside of 298.44%. Given 5E Advanced Materials’ higher possible upside, analysts clearly believe 5E Advanced Materials is more favorable than Sherwin-Williams.

Profitability

This table compares Sherwin-Williams and 5E Advanced Materials’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sherwin-Williams	10.86%	64.55%	11.10%
5E Advanced Materials	N/A	-71.87%	-63.88%

Earnings and Valuation

This table compares Sherwin-Williams and 5E Advanced Materials”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sherwin-Williams	$23.94 billion	3.26	$2.57 billion	$10.42	30.38
5E Advanced Materials	N/A	N/A	-$31.56 million	($2.67)	-0.60

Sherwin-Williams has higher revenue and earnings than 5E Advanced Materials. 5E Advanced Materials is trading at a lower price-to-earnings ratio than Sherwin-Williams, indicating that it is currently the more affordable of the two stocks.

Summary

Sherwin-Williams beats 5E Advanced Materials on 11 of the 13 factors compared between the two stocks.

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.

About 5E Advanced Materials

5E Advanced Materials, Inc. engages in the exploration and development of mineral properties in Australia and the United States. The company primarily explores for borates and lithium deposits. It holds 100% interest in the Fort Cady project located in the Mojave Desert region in eastern San Bernardino County, California. The company was formerly known as American Pacific Borates Limited. The company was incorporated in 2016 and is based in Hesperia, California.