PPG INDUSTRIES INC (PPG)

US6935061076 - Common Stock

128.675  +1.53 (+1.2%)

Fundamental Rating

6

Taking everything into account, PPG scores 6 out of 10 in our fundamental rating. PPG was compared to 84 industry peers in the Chemicals industry. While PPG has a great profitability rating, there are some minor concerns on its financial health. PPG has a decent growth rate and is not valued too expensively.



8

1. Profitability

1.1 Basic Checks

PPG had positive earnings in the past year.
PPG had a positive operating cash flow in the past year.
In the past 5 years PPG has always been profitable.
In the past 5 years PPG always reported a positive cash flow from operatings.

1.2 Ratios

Looking at the Return On Assets, with a value of 6.43%, PPG belongs to the top of the industry, outperforming 80.95% of the companies in the same industry.
With an excellent Return On Equity value of 17.71%, PPG belongs to the best of the industry, outperforming 84.52% of the companies in the same industry.
PPG's Return On Invested Capital of 10.08% is amongst the best of the industry. PPG outperforms 88.10% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PPG is in line with the industry average of 6.71%.
The last Return On Invested Capital (10.08%) for PPG is above the 3 year average (8.56%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 6.43%
ROE 17.71%
ROIC 10.08%
ROA(3y)5.85%
ROA(5y)6%
ROE(3y)18.22%
ROE(5y)19.36%
ROIC(3y)8.56%
ROIC(5y)8.98%

1.3 Margins

The Profit Margin of PPG (7.74%) is better than 77.38% of its industry peers.
PPG's Profit Margin has declined in the last couple of years.
PPG has a Operating Margin of 12.41%. This is in the better half of the industry: PPG outperforms 73.81% of its industry peers.
In the last couple of years the Operating Margin of PPG has remained more or less at the same level.
Looking at the Gross Margin, with a value of 41.72%, PPG belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
PPG's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 12.41%
PM (TTM) 7.74%
GM 41.72%
OM growth 3Y-0.16%
OM growth 5Y1.14%
PM growth 3Y-3.12%
PM growth 5Y-4.41%
GM growth 3Y-2.06%
GM growth 5Y-0.04%

6

2. Health

2.1 Basic Checks

PPG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, PPG has about the same amount of shares outstanding.
PPG has less shares outstanding than it did 5 years ago.
PPG has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 4.00 indicates that PPG is not in any danger for bankruptcy at the moment.
PPG has a Altman-Z score of 4.00. This is amongst the best in the industry. PPG outperforms 85.71% of its industry peers.
The Debt to FCF ratio of PPG is 3.95, which is a good value as it means it would take PPG, 3.95 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of PPG (3.95) is better than 75.00% of its industry peers.
PPG has a Debt/Equity ratio of 0.75. This is a neutral value indicating PPG is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.75, PPG perfoms like the industry average, outperforming 45.24% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.75
Debt/FCF 3.95
Altman-Z 4
ROIC/WACC1.26
WACC8%

2.3 Liquidity

A Current Ratio of 1.55 indicates that PPG should not have too much problems paying its short term obligations.
The Current ratio of PPG (1.55) is worse than 70.24% of its industry peers.
A Quick Ratio of 1.08 indicates that PPG should not have too much problems paying its short term obligations.
PPG has a worse Quick ratio (1.08) than 63.10% of its industry peers.
Industry RankSector Rank
Current Ratio 1.55
Quick Ratio 1.08

4

3. Growth

3.1 Past

PPG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.43%, which is quite good.
PPG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.42% yearly.
Looking at the last year, PPG shows a small growth in Revenue. The Revenue has grown by 2.56% in the last year.
The Revenue has been growing slightly by 3.48% on average over the past years.
EPS 1Y (TTM)18.43%
EPS 3Y10.4%
EPS 5Y5.42%
EPS Q2Q%2.2%
Revenue 1Y (TTM)2.56%
Revenue growth 3Y9.67%
Revenue growth 5Y3.48%
Sales Q2Q%-1.58%

3.2 Future

Based on estimates for the next years, PPG will show a small growth in Earnings Per Share. The EPS will grow by 6.39% on average per year.
The Revenue is expected to grow by 3.25% on average over the next years.
EPS Next Y11.17%
EPS Next 2Y10.88%
EPS Next 3Y10.53%
EPS Next 5Y6.39%
Revenue Next Year1.8%
Revenue Next 2Y2.62%
Revenue Next 3Y3.19%
Revenue Next 5Y3.25%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

5

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 16.69, PPG is valued correctly.
Based on the Price/Earnings ratio, PPG is valued a bit cheaper than 72.62% of the companies in the same industry.
PPG is valuated rather cheaply when we compare the Price/Earnings ratio to 27.82, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 13.65 indicates a correct valuation of PPG.
Based on the Price/Forward Earnings ratio, PPG is valued a bit cheaper than the industry average as 63.10% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 19.80. PPG is valued slightly cheaper when compared to this.
Industry RankSector Rank
PE 16.69
Fwd PE 13.65

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as PPG.
Based on the Price/Free Cash Flow ratio, PPG is valued a bit cheaper than the industry average as 61.90% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 19.16
EV/EBITDA 12.36

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of PPG may justify a higher PE ratio.
PEG (NY)1.49
PEG (5Y)3.08
EPS Next 2Y10.88%
EPS Next 3Y10.53%

6

5. Dividend

5.1 Amount

PPG has a Yearly Dividend Yield of 1.98%. Purely for dividend investing, there may be better candidates out there.
PPG's Dividend Yield is a higher than the industry average which is at 3.11.
PPG's Dividend Yield is comparable with the S&P500 average which is at 2.37.
Industry RankSector Rank
Dividend Yield 1.98%

5.2 History

The dividend of PPG is nicely growing with an annual growth rate of 6.45%!
PPG has paid a dividend for at least 10 years, which is a reliable track record.
PPG has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.45%
Div Incr Years19
Div Non Decr Years19

5.3 Sustainability

PPG pays out 43.03% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of PPG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP43.03%
EPS Next 2Y10.88%
EPS Next 3Y10.53%

PPG INDUSTRIES INC

NYSE:PPG (5/30/2024, 11:49:04 AM)

128.675

+1.53 (+1.2%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap30.28B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 1.98%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 16.69
Fwd PE 13.65
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.49
PEG (5Y)3.08
Profitability
Industry RankSector Rank
ROA 6.43%
ROE 17.71%
ROCE
ROIC
ROICexc
ROICexgc
OM 12.41%
PM (TTM) 7.74%
GM 41.72%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.83
Health
Industry RankSector Rank
Debt/Equity 0.75
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.55
Quick Ratio 1.08
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)18.43%
EPS 3Y10.4%
EPS 5Y
EPS Q2Q%
EPS Next Y11.17%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)2.56%
Revenue growth 3Y9.67%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y