TOL vs SHW

For growth investors, The Sherwin-Williams Company (SHW) is the stronger pick with 2.

1% revenue growth year-over-year, versus 1. 1% for Toll Brothers, Inc. (TOL). Toll Brothers, Inc. (TOL) offers the better valuation at 10. 5x trailing P/E (11. 1x forward), making it the more compelling value choice. Analysts rate The Sherwin-Williams Company (SHW) a "Buy" — based on 38 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Toll Brothers, Inc.

(TOL) is the cheapest at 10. 5x versus The Sherwin-Williams Company at 31. 5x. On forward P/E, Toll Brothers, Inc. is actually cheaper at 11. 1x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Toll Brothers, Inc. wins at 0. 35x versus The Sherwin-Williams Company's 3. 98x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Toll Brothers, Inc.

(TOL) delivered a total return of +122. 2%, compared to +18. 1% for The Sherwin-Williams Company (SHW). Over 10 years, the gap is even starker: TOL returned +458. 1% versus SHW's +255. 1%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), The Sherwin-Williams Company (SHW) is the lower-risk stock at 0.

79β versus Toll Brothers, Inc. 's 1. 21β — meaning TOL is approximately 52% more volatile than SHW relative to the S&P 500. On balance sheet safety, Toll Brothers, Inc. (TOL) carries a lower debt/equity ratio of 35% versus 3% for The Sherwin-Williams Company — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), The Sherwin-Williams Company (SHW) is pulling ahead at 2.

1% versus 1. 1% for Toll Brothers, Inc. (TOL). On earnings-per-share growth, the picture is similar: The Sherwin-Williams Company grew EPS -2. 7% year-over-year, compared to -10. 1% for Toll Brothers, Inc.. Over a 3-year CAGR, TOL leads at 2. 2% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Toll Brothers, Inc.

(TOL) is the more profitable company, earning 12. 3% net margin versus 10. 9% for The Sherwin-Williams Company — meaning it keeps 12. 3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: SHW leads at 16. 1% versus 15. 7% for TOL. At the gross margin level — before operating expenses — SHW leads at 48. 9%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Toll Brothers, Inc. (TOL) is the more undervalued stock at a PEG of 0. 35x versus The Sherwin-Williams Company's 3. 98x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Toll Brothers, Inc. (TOL) trades at 11. 1x forward P/E versus 27. 6x for The Sherwin-Williams Company — 16. 5x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for SHW: 20. 3% to $389. 43.

All stocks in this comparison pay dividends.

The Sherwin-Williams Company (SHW) offers the highest yield at 1. 0%, versus 0. 7% for Toll Brothers, Inc. (TOL).

For long-horizon retirement investors, The Sherwin-Williams Company (SHW) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.

79), 1. 0% yield, +255. 1% 10Y return). Both have compounded well over 10 years (SHW: +255. 1%, TOL: +458. 1%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

These companies operate in different sectors (TOL (Consumer Cyclical) and SHW (Basic Materials)), which means they face different economic cycles, regulatory environments, and macro sensitivities — making direct comparison nuanced.

In terms of investment character: TOL is a mid-cap deep-value stock; SHW is a mid-cap quality compounder stock. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.