Payout Yield

The Sherwin-Williams Company (NYSE:SHW) authorized a new program to purchase 30 million shares, replacing the existing program.

The company provided no details on timing or funding of the program.

Founded in 1866, The Sherwin-Williams Company is a world leader in the manufacture, development, distribution and sale of coatings and related products to professional, industrial, commercial and retail customers.

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PAYOUT YIELD ANALYSIS

With 131 million shares outstanding and a $63 share price, the 30 million share repurchase represents a 23% share reduction or a return to shareholders of $1.9 billion or $14 per share.

Based on the company’s track record and current operating cash flow, we estimate that the company will repurchase a minimum of $300 million per year and return $2.29 per share for the forseeable future.  This rate can go higher if management decides to return a higher percentage of operating cash flow or borrow to accelerate the buyback program.

Combined with the annualized dividend of $1.26, the Total Payout is projected to be $3.55 per share over the next 4 quarters.  At a share price of $63, the Total Payout Yield is projected to be 5.6%.

- Payout Yield Staff