It’s funny sometimes how a great growth stock can be right under our noses, but we just don’t notice.

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The company might have lots of locations, offer quality products, be doing a brisk business, and have a soaring stock price. Yet for some reason, it really isn’t on anyone’s radar.

I say this with a particular company in mind — a large, well-established, well-known company with products just about every consumer is familiar with. Sales at this company have been strong and steady, climbing 7% a year from $7.1 billion in 2009 to $9.6 billion in 2013. Earnings per share (EPS) have also been solid, rising 12.5% a year from $3.78 in 2009 to $6.80 this year.

The company’s stock has been awesome: Since the beginning of 2009, it’s up about 205%. That’s nearly twice the 104% return of SPDR S&P 500 (NYSE: SPY), an exchange-traded fund (ETF) that tracks the overall market.

You’d think a stock like that would be making headlines everywhere. But you don’t see it mentioned much, maybe because it’s not in a very glamorous business. Or investors might assume it lacks the potential for appreciation simply because the company has been around so long (well over a century).

This often ignored growth stock is Sherwin-Williams (NYSE: SHW), the largest house paint provider in the U.S. and a firm that I expect will keep delivering excellent returns for years to come.

As you might expect, the company’s big gun is its paint stores group, which consists of more than 3,500 paint stores worldwide and generates about 60% of total sales. Among the division’s key revenue sources are wall-prep products and coverings; stains; tools such as brushes, rollers and scrapers; and, of course, Sherwin-Williams brand paints. The division posted a profit increase of 21% in the first three quarters of 2013 from the same period the previous year, leading the company.

	Wikipedia/M.O. Stevens
	Sherwin-Williams is the largest house paint provider in the U.S. and has more than 3,500 paint stores worldwide.

The global finishes group, which operates mainly in Europe and Asia, accounts for about 20% of revenue by making and selling specialized items like automotive finishes and refinishing products. Profit in this division also rose quickly in the first three quarters of 2013, up 18%.

Sherwin-Williams’ consumer group generates about 14% of sales and distributes paints and other products through mass merchandisers and other third-party outlets. Profit in this group rose nearly 7% in the first nine months of last year.

There’s also a Latin America coatings group that makes and sells architectural paints and coatings, primarily in South America, and accounts for about 6% of revenue. Despite a 6% increase in sales in the first three quarters of 2013, the division’s profit dropped 59%, due to unfavorable exchange rates and a onetime tax assessment by Brazil.

Still, overall growth for SHW has been consistent and impressive, and that should continue in coming years. The economy and housing market are now clearly improving, and dual-income households have become the norm. So homeowners are more likely than ever to hire professional painters because they often have the money but no time to do it themselves. At least 60% of residential paint jobs are done by professionals, analysts estimate, and that number could rise if the economy keeps getting better.

These trends bode well for Sherwin-Williams, considering the company sells premium paints and painting supplies — exactly the types of products that professionals prefer. Such products also hold great appeal for serious do-it-yourselfers, who value quality paint just as much as professionals and are often willing to pay more for better results.

Importantly, like just about any company that wants to grow these days, Sherwin-Williams is looking to keep expanding internationally. For instance, last January, the company announced its acquisition of Changzhou Pulanna Coating Co., a leader in China’s automotive coatings industry, for an undisclosed amount.

Sherwin-Williams is also working to complete its acquisition of the North American assets of Mexican paint and paint supplies company Consorcio Comex, which has 314 stores in the U.S. and Canada. The approximately $2.3 billion deal has already been rejected twice by Mexican antitrust authorities, but Sherwin-Williams said last month that it plans to work with regulators on a solution that would allow the deal to go through.

Adding to Sherwin-Williams’ legal obstacles, the company was recently ordered (along with NL Industries (NYSE: NL) and ConAgra Foods (NYSE: CAG)) by a California Superior Court judge to pay $1.1 billion in damages related to lead paint products sold by the three companies decades earlier, when lead-based paint was commonly used.

I’m not terribly concerned about the risk of further lawsuits for lead paint contamination. The paint industry has faced such suits before and typically won. And Sherwin-Williams can comfortably handle the financial impact of the few it might lose.

Thus, I’m looking for EPS to more than double from its current $6.76 to $13.97 in 2018, as consensus estimates project. If you apply SHW’s historical price-to-earnings (P/E) ratio of about 20 to that EPS projection, you get a share price estimate of $279 — a 52% jump from the current price near $183.

Risks to Consider: The California court’s decision could open the door for more lawsuits related to lead paint. Mexican regulators could nix Sherwin-Williams’ acquisition of Consorcio Comex, crimping Sherwin-Williams’ international growth.

Action to Take –> I consider SHW a buy despite its rich-looking P/E of 27. The stock appears to be a much better value when you compare the price with projected earnings: SHW is selling for 20 times 2014’s projected EPS of $9.15 and for just 13 times 2018’s projected EPS of $13.97.

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