Home > Comparison > Basic Materials > SHW vs LYB
The strategic rivalry between The Sherwin-Williams Company and LyondellBasell Industries N.V. shapes leadership in the specialty chemicals sector. Sherwin-Williams operates a diversified, vertically integrated paint and coatings business, while LyondellBasell focuses on olefins, polyolefins, and advanced polymers with a capital-intensive refining segment. This analysis pits Sherwin-Williams’ stable consumer focus against LyondellBasell’s industrial scale to identify which offers superior risk-adjusted returns for a balanced portfolio.
Table of contents
Companies Overview
The Sherwin-Williams Company and LyondellBasell Industries N.V. dominate key niches in the specialty chemicals sector.
The Sherwin-Williams Company: Leader in Paints and Coatings
Sherwin-Williams commands the architectural and industrial coatings market. It generates revenue by developing, manufacturing, and selling paints, coatings, and related products primarily in the Americas. In 2026, its strategic focus remains on expanding its company-operated stores and enhancing product innovation to serve professional and retail customers effectively.
LyondellBasell Industries N.V.: Global Polyolefins Powerhouse
LyondellBasell stands as a major producer of olefins, polyolefins, and advanced polymers worldwide. It earns revenue by manufacturing polyethylene, polypropylene, and refining crude oil into fuels and chemicals. The company’s 2026 strategy emphasizes technological leadership in chemical processes and expanding its global footprint across multiple continents.
Strategic Collision: Similarities & Divergences
Both companies operate within specialty chemicals but pursue different philosophies: Sherwin-Williams focuses on a direct-to-customer retail model, while LyondellBasell relies on global industrial-scale production and licensing technology. Their primary battleground lies in chemical innovation and market penetration. Sherwin-Williams offers steady growth with strong brand loyalty, whereas LyondellBasell presents a cyclical, capital-intensive profile tied to commodity markets.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | The Sherwin-Williams Company (SHW) | LyondellBasell Industries N.V. (LYB) |
|---|---|---|
| Revenue | 23.6B | 40.3B |
| Cost of Revenue | 12.0B | 35.7B |
| Operating Expenses | 7.7B | 2.7B |
| Gross Profit | 11.5B | 4.6B |
| EBITDA | 4.4B | 3.6B |
| EBIT | 3.8B | 2.1B |
| Interest Expense | 469M | 481M |
| Net Income | 2.6B | 1.4B |
| EPS | 10.38 | 4.16 |
| Fiscal Year | 2025 | 2024 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals which company operates its business most efficiently and captures value for shareholders.
The Sherwin-Williams Company Analysis
Sherwin-Williams grew revenue steadily from $19.9B in 2021 to $23.6B in 2025. Its net income rose 38% over five years, reaching $2.57B in 2025. The company maintains robust gross and net margins near 49% and 11%, respectively, demonstrating strong operational efficiency despite slight margin pressure in 2025. It shows solid momentum but faces minor headwinds in margin growth.
LyondellBasell Industries N.V. Analysis
LyondellBasell’s revenue peaked at $50.5B in 2022 before falling to $40.3B in 2024. Net income declined over the period, dropping to $1.36B in 2024, with net margin slipping to just 3.4%. Gross margin sits at a modest 11%, reflecting weaker cost control. Recent years show negative growth across key profitability metrics, signaling operational challenges and margin compression.
Margin Strength vs. Top-Line Scale
Sherwin-Williams clearly outperforms LyondellBasell in profitability and margin sustainability. While LyondellBasell boasts higher revenue scale, its eroding margins and declining net income weigh heavily on its financial health. Sherwin-Williams offers a more attractive profile for investors seeking consistent earnings quality and margin resilience.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose underlying fiscal health, valuation premiums, and capital efficiency for clear company comparison:
| Ratios | The Sherwin-Williams Company (SHW) | LyondellBasell Industries N.V. (LYB) |
|---|---|---|
| ROE | 55.9% | 10.9% |
| ROIC | 15.2% | 5.1% |
| P/E | 31.1 | 17.7 |
| P/B | 17.4 | 1.94 |
| Current Ratio | 0.87 | 1.83 |
| Quick Ratio | 0.53 | 1.13 |
| D/E (Debt-to-Equity) | 2.81 | 1.04 |
| Debt-to-Assets | 50.0% | 36.2% |
| Interest Coverage | 8.11 | 3.78 |
| Asset Turnover | 0.91 | 1.13 |
| Fixed Asset Turnover | 3.84 | 2.44 |
| Payout Ratio | 30.3% | 126.5% |
| Dividend Yield | 0.98% | 7.13% |
| Fiscal Year | 2025 | 2024 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios act as a company’s DNA, exposing hidden risks and operational strengths that shape investor decisions.
The Sherwin-Williams Company
Sherwin-Williams delivers a strong ROE of 55.9% and a net margin of 10.9%, signaling robust profitability. The stock trades at a stretched P/E of 31.1 and P/B of 17.4, indicating premium valuation. Dividends yield just 0.98%, suggesting capital is mostly reinvested for growth and operational efficiency.
LyondellBasell Industries N.V.
LyondellBasell reports zero profitability ratios for 2025, reflecting operational challenges or data gaps. Valuation metrics appear favorable but lack substance due to unavailable or zero values. The absence of dividends and weak liquidity ratios highlight elevated risk and unclear shareholder return strategy.
Premium Profitability vs. Unclear Metrics
Sherwin-Williams offers a clear profile of strong profitability but at a premium price, while LyondellBasell’s metrics remain incomplete and unfavorable. Investors seeking operational clarity and proven returns may prefer Sherwin-Williams. Those comfortable with uncertainty might consider LyondellBasell’s riskier profile.
Which one offers the Superior Shareholder Reward?
I compare Sherwin-Williams (SHW) and LyondellBasell (LYB) on dividends, payout ratios, and buybacks for 2026. SHW yields ~0.98% with a 30% payout ratio, balancing steady dividends and moderate reinvestment. LYB offers a striking 7.13% dividend yield with a payout over 120%, signaling aggressive shareholder returns but potential sustainability risks. SHW’s buyback activity is moderate, supporting long-term value without over-leveraging. LYB’s data shows high financial leverage and dividend payouts above free cash flow, raising red flags about capital allocation. I conclude SHW provides a more sustainable and attractive total return profile for disciplined investors in 2026.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of both firms, highlighting their strategic strengths and vulnerabilities:
Sherwin-Williams (SHW) displays a balanced profile with very favorable ROE and ROA scores, indicating efficient capital and asset use. LyondellBasell (LYB) leverages a strong discounted cash flow (DCF) score but suffers from weak profitability metrics. Both firms share poor debt and valuation scores, signaling elevated financial risk and possible market overvaluation. SHW’s diversified strengths contrast with LYB’s reliance on cash flow efficiency.
Bankruptcy Risk: Solvency Showdown
SHW’s Altman Z-Score of 3.84 places it securely in the safe zone, while LYB’s score is unavailable, limiting direct comparison. SHW’s score signals strong solvency and low bankruptcy risk amid current market cycles:
Financial Health: Quality of Operations
SHW’s Piotroski F-Score of 7 indicates robust financial health with few red flags. LYB’s score of 3 raises concerns, suggesting weaker operational quality and potential internal financial stress:
How are the two companies positioned?
This section dissects the operational DNA of SHW and LYB by comparing their revenue distribution across segments and analyzing their internal strengths and weaknesses. The goal is to confront their economic moats to reveal which business model delivers the most resilient and sustainable competitive advantage today.
Revenue Segmentation: The Strategic Mix
This comparison dissects how The Sherwin-Williams Company and LyondellBasell Industries diversify income streams and where their primary sector bets lie:
Sherwin-Williams relies heavily on its Paint Stores Group, which anchors revenue at $13.2B in 2024, dwarfing other segments like Consumer ($8.4B) and Global Finishes ($6.9B). This concentration signals strong ecosystem lock-in but also concentration risk. LyondellBasell displays a more balanced portfolio, with Refined Products ($8.1B), Polyethylene ($7.6B), and Polypropylene ($6.3B) sharing the revenue load, reflecting diversified chemical and polymer exposure crucial for navigating cyclical volatility.
Strengths and Weaknesses Comparison
This table compares the Strengths and Weaknesses of The Sherwin-Williams Company (SHW) and LyondellBasell Industries N.V. (LYB):
SHW Strengths
- Strong profitability with 10.9% net margin and 55.86% ROE
- Favorable ROIC (15.21%) vs. WACC (8.82%)
- High fixed asset turnover (3.84) indicates efficient asset use
- Diverse revenue from Consumer, Global Finishes, and Paint Stores groups
LYB Strengths
- Diverse product portfolio including polyethylene, polypropylene, and refined products
- Strong global presence with significant revenue from the United States, China, and Europe
- Favorable debt-to-equity and debt-to-assets ratios indicate conservative leverage
- Presence in multiple chemical product segments supports market resilience
SHW Weaknesses
- Unfavorable liquidity ratios (current ratio 0.87, quick ratio 0.53) signal short-term risk
- High debt-to-equity ratio (2.81) increases financial risk
- Elevated price multiples (PE 31.08, PB 17.36) may limit valuation upside
- Slightly unfavorable overall financial ratios with 42.86% unfavorable metrics
LYB Weaknesses
- Zero profitability metrics (net margin, ROE, ROIC at 0%) indicate operational challenges
- Unavailable WACC complicates cost of capital assessment
- Unfavorable asset turnover ratios suggest inefficiency
- Low interest coverage (4.33) and zero dividend yield reflect financial constraints
Overall, SHW demonstrates strong profitability and operational efficiency but faces liquidity and leverage concerns. LYB’s strengths lie in its diversified product base and conservative leverage, yet it struggles with profitability and asset utilization. These contrasts shape their strategic priorities in financial health and market positioning.
The Moat Duel: Analyzing Competitive Defensibility
A durable structural moat shields long-term profits from relentless competition erosion. Let’s dissect how these firms defend their economic territory:
The Sherwin-Williams Company: Intangible Assets and Brand Strength
Sherwin-Williams leverages deep brand loyalty and proprietary formulations, sustaining a robust 6.4% ROIC premium over WACC. Its strong margin stability reflects this intangible asset moat, poised to deepen with expansion in industrial coatings by 2026.
LyondellBasell Industries N.V.: Scale and Cost Advantage
LyondellBasell’s moat centers on scale-driven cost advantages in polyolefins, contrasting Sherwin’s brand moat. However, declining ROIC trends and margin pressures weaken its competitive grip. Future growth hinges on refining technology and market diversification to halt erosion.
Brand Intangibles vs. Scale Efficiency: Moat Durability in Focus
Sherwin-Williams exhibits a wider, growing moat grounded in brand equity and innovation. LyondellBasell’s scale advantage faces durability risks amid margin contraction. Sherwin-Williams stands better equipped to defend market share through sustainable profitability.
Which stock offers better returns?
The past year shows distinct price trajectories for Sherwin-Williams and LyondellBasell, with Sherwin-Williams gaining steadily while LyondellBasell suffered significant losses before recent partial recovery.
Trend Comparison
Sherwin-Williams (SHW) posted a 6.48% price increase over the past 12 months, marking a bullish trend with accelerating momentum. The stock ranged between 292 and 397, showing healthy volatility.
LyondellBasell (LYB) declined sharply by 49.7% in the same period, reflecting a bearish trend despite acceleration. Its price fluctuated from 43 to 105, indicating high volatility and downside pressure.
SHW’s sustained 6.48% gain outperforms LYB’s large 49.7% loss, establishing Sherwin-Williams as the stronger market performer over the last year.
Target Prices
Analysts present a moderate upside consensus for The Sherwin-Williams Company and LyondellBasell Industries.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| The Sherwin-Williams Company | 371 | 420 | 393.5 |
| LyondellBasell Industries N.V. | 36 | 53 | 46.63 |
Sherwin-Williams trades below its consensus target, suggesting potential appreciation. LyondellBasell’s current price sits near its consensus, implying limited immediate upside.
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How do institutions grade them?
Below is a summary of the latest institutional grades for The Sherwin-Williams Company and LyondellBasell Industries N.V.:
The Sherwin-Williams Company Grades
This table shows recent analyst ratings and grade changes for Sherwin-Williams:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Outperform | 2026-01-30 |
| UBS | Maintain | Buy | 2026-01-12 |
| Citigroup | Upgrade | Buy | 2025-12-18 |
| Mizuho | Maintain | Outperform | 2025-12-18 |
| Citigroup | Maintain | Neutral | 2025-10-30 |
| Wells Fargo | Maintain | Overweight | 2025-10-29 |
| RBC Capital | Maintain | Outperform | 2025-10-29 |
| JP Morgan | Maintain | Overweight | 2025-10-29 |
| UBS | Maintain | Buy | 2025-10-29 |
| B of A Securities | Maintain | Neutral | 2025-10-14 |
LyondellBasell Industries N.V. Grades
This table presents recent analyst ratings and grade revisions for LyondellBasell:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Sector Perform | 2026-01-16 |
| Citigroup | Maintain | Neutral | 2026-01-15 |
| UBS | Maintain | Sell | 2025-12-23 |
| Wells Fargo | Downgrade | Equal Weight | 2025-12-19 |
| Citigroup | Maintain | Neutral | 2025-12-18 |
| BMO Capital | Downgrade | Underperform | 2025-12-15 |
| Mizuho | Maintain | Neutral | 2025-12-11 |
| Citigroup | Maintain | Neutral | 2025-11-19 |
| Evercore ISI Group | Maintain | In Line | 2025-11-11 |
| Wells Fargo | Maintain | Overweight | 2025-11-03 |
Which company has the best grades?
Sherwin-Williams consistently receives positive grades like Outperform and Buy, reflecting strong analyst conviction. LyondellBasell’s ratings skew neutral to negative, including Sell and Underperform. Investors might interpret Sherwin-Williams’ superior grades as a sign of relative strength and confidence.
Risks specific to each company
The following categories identify the critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
The Sherwin-Williams Company
- Strong brand presence and diversified segments support resilience amid specialty chemicals competition.
LyondellBasell Industries N.V.
- Faces intense global competition in olefins and polyolefins, with margin pressures from commodity cyclicality.
2. Capital Structure & Debt
The Sherwin-Williams Company
- High debt-to-equity ratio (2.81) signals leverage risk despite solid interest coverage (8.12x).
LyondellBasell Industries N.V.
- Debt metrics unavailable but debt-to-equity score favorable; cautious view needed due to data gaps.
3. Stock Volatility
The Sherwin-Williams Company
- Beta of 1.259 indicates above-market volatility, reflecting sensitivity to economic cycles.
LyondellBasell Industries N.V.
- Lower beta of 0.739 suggests less volatility, potentially offering defensive characteristics.
4. Regulatory & Legal
The Sherwin-Williams Company
- Subject to environmental regulations related to coatings and chemical use in multiple jurisdictions.
LyondellBasell Industries N.V.
- Faces complex regulatory frameworks across refining and chemical manufacturing in diverse global markets.
5. Supply Chain & Operations
The Sherwin-Williams Company
- Extensive store network may expose to distribution disruptions but aids direct customer access.
LyondellBasell Industries N.V.
- Global operations dependent on raw materials and energy inputs vulnerable to supply shocks.
6. ESG & Climate Transition
The Sherwin-Williams Company
- Increasing pressure to reduce emissions in coatings production; transitioning to sustainable products.
LyondellBasell Industries N.V.
- Heavy carbon footprint from refining and chemicals poses transition risks amidst tightening climate policies.
7. Geopolitical Exposure
The Sherwin-Williams Company
- North and South American focus limits geopolitical risk but exposed to trade tensions.
LyondellBasell Industries N.V.
- Broad international footprint increases exposure to geopolitical instability and trade disruptions.
Which company shows a better risk-adjusted profile?
Sherwin-Williams faces leverage and valuation risks but benefits from strong operational scores and a stable Altman Z-score of 3.84. LyondellBasell struggles with profitability and weak financial metrics, reflected in a low Piotroski score of 3 and unavailable Altman Z-score. Sherwin-Williams offers a better risk-adjusted profile, despite slightly elevated market volatility. The most impactful risk for Sherwin-Williams is its high debt level, which could strain flexibility in economic downturns. For LyondellBasell, persistent zero profitability signals fundamental challenges. Recent financial evaluations confirm Sherwin-Williams’ stronger operational health, reinforcing cautious optimism for investors.
Final Verdict: Which stock to choose?
The Sherwin-Williams Company’s superpower lies in its durable competitive advantage, evidenced by a steadily growing ROIC well above its cost of capital. It operates with strong profitability and asset efficiency, though its high leverage and liquidity constraints remain points of vigilance. This stock suits investors seeking aggressive growth underpinned by operational excellence.
LyondellBasell Industries’ strategic moat centers on its commodity chemicals scale and recurring cash flow potential, offering a safety profile that contrasts Sherwin-Williams’ higher leverage risk. While its recent financials show weakness and less pronounced profitability, it appeals to investors looking for GARP – growth at a reasonable price – with exposure to cyclical recovery.
If you prioritize durable competitive advantage and operational strength, Sherwin-Williams outshines due to its value creation and consistent profitability. However, if you seek exposure to commodity-driven turnaround opportunities with better near-term stability, LyondellBasell offers a more cyclical play with a defensive cash flow profile. Each presents a distinct risk-reward scenario tailored to specific investor strategies.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of The Sherwin-Williams Company and LyondellBasell Industries N.V. to enhance your investment decisions:
