The last time you repainted the dining room or gave the kitchen a touch-up, there's a good chance you were brushing on a little Sherwin-Williams (NYSE:SHW), one of the world's largest paint suppliers. The firm has been around for more than 120 years and continues to compete with companies such as Akzo Nobel Coatings (NASDAQ:AKZOY), PPG Industries (NYSE:PPG), and hordes of local businesses for a share of the architectural paint and coatings market.

Sherwin's business is simple. After developing and manufacturing self-branded paints, or brands like the Martha Stewart Signature Collection, it sells them directly to professionals and do-it-yourselfers through more than 2,600 company-owned stores. Then, it generates further revenue by wholesaling to retailers. Industry giants such as Wal-Mart (NYSE:WMT), Lowe's (NYSE:LOW), and Sears (NYSE:S) sell some of Sherwin's top brands.

Lately, the business has grown as more customers hit the stores, keeping with the home-improvement trends we've noted at Lowe's and Home Depot (NYSE:HD). In its recently reported Q4, Sherwin, therefore, produced quite a bit of green -- and I don't mean its forest meadow paint.

Net income was up 24% over the prior quarter, thanks to an 11% sales jump and lower selling, general, and administrative expenses. Increased paint revenue was the highlight of the quarter, helping boost same-store sales by 8.6%, the highest rate since 1996. For the full year, sales grew 4%, and income expanded 7%, excluding an accounting change from 2002.

The company also recently announced its 25th consecutive dividend increase, to $0.17 per share quarterly. That brings the yield to around 2% at today's price. Couple the rising dividend with Sherwin's aggressive share repurchase program (the buybacks contributed about 1% to EPS growth for 2003), and you can see that management uses a good chunk of yearly cash flows to increase shareholder value.

As for the cash flow itself, Sherwin continues to crank it out. For fiscal 2003, free cash flow clocked in at $442 million. This yields a price-to-FCF multiple of 11, while the P/E sits at around 15. If you combine the 2% dividend, the 1% annual gain from share buybacks, and the 11% expected earnings growth, the company seems to be fairly valued. Look at the massive cash flows and shareholder friendly management, however, and it's not hard to see that this painter's stock is well positioned to benefit if the domestic and international sales outlook stays bright.

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Matt Thurmond doesn't own shares of any of the companies mentioned in this article.