PPG INDUSTRIES INC (PPG) Stock Fundamental Analysis
NYSE:PPG - US6935061076 - Common Stock
112.57 USD
+0.43 (+0.38%)
112.57 USD
0 (0%)
Taking everything into account, PPG scores 5 out of 10 in our fundamental rating. PPG was compared to 84 industry peers in the Chemicals industry. PPG scores excellent on profitability, but there are some minor concerns on its financial health. PPG has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
PPG had positive earnings in the past year.
In the past year PPG had a positive cash flow from operations.
Each year in the past 5 years PPG has been profitable.
Each year in the past 5 years PPG had a positive operating cash flow.
1.2 Ratios
PPG has a better Return On Assets (4.57%) than 78.57% of its industry peers.
With an excellent Return On Equity value of 13.34%, PPG belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
PPG has a better Return On Invested Capital (9.60%) than 82.14% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PPG is above the industry average of 6.43%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.57% | ||
| ROE | 13.34% | ||
| ROIC | 9.6% |
ROA(3y)5.52%
ROA(5y)5.74%
ROE(3y)16.08%
ROE(5y)17.95%
ROIC(3y)9.72%
ROIC(5y)9.04%
1.3 Margins
Looking at the Profit Margin, with a value of 6.92%, PPG is in the better half of the industry, outperforming 76.19% of the companies in the same industry.
In the last couple of years the Profit Margin of PPG has declined.
The Operating Margin of PPG (14.41%) is better than 77.38% of its industry peers.
PPG's Operating Margin has improved in the last couple of years.
PPG has a better Gross Margin (40.85%) than 84.52% of its industry peers.
In the last couple of years the Gross Margin of PPG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.41% | ||
| PM (TTM) | 6.92% | ||
| GM | 40.85% |
OM growth 3Y12.52%
OM growth 5Y2.91%
PM growth 3Y-6.31%
PM growth 5Y-3.01%
GM growth 3Y2.4%
GM growth 5Y-0.56%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), PPG is creating some value.
Compared to 1 year ago, PPG has less shares outstanding
PPG has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, PPG has a worse debt to assets ratio.
2.2 Solvency
PPG has an Altman-Z score of 3.58. This indicates that PPG is financially healthy and has little risk of bankruptcy at the moment.
PPG has a better Altman-Z score (3.58) than 82.14% of its industry peers.
PPG has a debt to FCF ratio of 9.09. This is a negative value and a sign of low solvency as PPG would need 9.09 years to pay back of all of its debts.
PPG's Debt to FCF ratio of 9.09 is fine compared to the rest of the industry. PPG outperforms 67.86% of its industry peers.
A Debt/Equity ratio of 0.78 indicates that PPG is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.78, PPG is in line with its industry, outperforming 46.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 9.09 | ||
| Altman-Z | 3.58 |
ROIC/WACC1.14
WACC8.46%
2.3 Liquidity
PPG has a Current Ratio of 1.42. This is a normal value and indicates that PPG is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.42, PPG is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
PPG has a Quick Ratio of 1.04. This is a normal value and indicates that PPG is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of PPG (1.04) is worse than 67.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.42 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
The earnings per share for PPG have decreased by -3.52% in the last year.
Measured over the past 5 years, PPG shows a small growth in Earnings Per Share. The EPS has been growing by 5.46% on average per year.
PPG shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -19.23%.
The Revenue has been growing slightly by 0.91% on average over the past years.
EPS 1Y (TTM)-3.52%
EPS 3Y6.16%
EPS 5Y5.46%
EPS Q2Q%-11.2%
Revenue 1Y (TTM)-19.23%
Revenue growth 3Y-1.94%
Revenue growth 5Y0.91%
Sales Q2Q%-12.49%
3.2 Future
The Earnings Per Share is expected to grow by 6.79% on average over the next years.
PPG is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.12% yearly.
EPS Next Y-1.65%
EPS Next 2Y3.49%
EPS Next 3Y5.44%
EPS Next 5Y6.79%
Revenue Next Year-11.08%
Revenue Next 2Y-4.29%
Revenue Next 3Y-1.91%
Revenue Next 5Y-0.12%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
PPG is valuated correctly with a Price/Earnings ratio of 14.66.
PPG's Price/Earnings ratio is a bit cheaper when compared to the industry. PPG is cheaper than 76.19% of the companies in the same industry.
PPG is valuated rather cheaply when we compare the Price/Earnings ratio to 27.08, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 12.98, the valuation of PPG can be described as correct.
Based on the Price/Forward Earnings ratio, PPG is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of PPG to the average of the S&P500 Index (22.67), we can say PPG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.66 | ||
| Fwd PE | 12.98 |
4.2 Price Multiples
PPG's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as PPG.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.48 | ||
| EV/EBITDA | 12.04 |
4.3 Compensation for Growth
PPG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.69
EPS Next 2Y3.49%
EPS Next 3Y5.44%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.55%, PPG has a reasonable but not impressive dividend return.
PPG's Dividend Yield is a higher than the industry average which is at 3.54.
PPG's Dividend Yield is comparable with the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.55% |
5.2 History
On average, the dividend of PPG grows each year by 6.16%, which is quite nice.
PPG has been paying a dividend for at least 10 years, so it has a reliable track record.
PPG has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.16%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
61.82% of the earnings are spent on dividend by PPG. This is not a sustainable payout ratio.
The dividend of PPG is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP61.82%
EPS Next 2Y3.49%
EPS Next 3Y5.44%
112.57
+0.43 (+0.38%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners87.3%
Inst Owner Change-1.04%
Ins Owners0.12%
Ins Owner Change0.3%
Market Cap25.41B
Analysts71.61
Price Target130.53 (15.95%)
Short Float %1.41%
Short Ratio1.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.55% |
Yearly Dividend2.67
Dividend Growth(5Y)6.16%
DP61.82%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.82%
Min EPS beat(2)-1.41%
Max EPS beat(2)5.06%
EPS beat(4)1
Avg EPS beat(4)-0.38%
Min EPS beat(4)-3.35%
Max EPS beat(4)5.06%
EPS beat(8)3
Avg EPS beat(8)0.53%
EPS beat(12)6
Avg EPS beat(12)2.75%
EPS beat(16)10
Avg EPS beat(16)4.43%
Revenue beat(2)0
Avg Revenue beat(2)-0.4%
Min Revenue beat(2)-0.54%
Max Revenue beat(2)-0.26%
Revenue beat(4)0
Avg Revenue beat(4)-3.05%
Min Revenue beat(4)-8.85%
Max Revenue beat(4)-0.26%
Revenue beat(8)1
Avg Revenue beat(8)-2.43%
Revenue beat(12)2
Avg Revenue beat(12)-1.7%
Revenue beat(16)5
Avg Revenue beat(16)-0.96%
PT rev (1m)-1.8%
PT rev (3m)0.3%
EPS NQ rev (1m)-0.35%
EPS NQ rev (3m)-2.45%
EPS NY rev (1m)-0.26%
EPS NY rev (3m)0.07%
Revenue NQ rev (1m)0.12%
Revenue NQ rev (3m)0.64%
Revenue NY rev (1m)0.28%
Revenue NY rev (3m)0.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.66 | ||
| Fwd PE | 12.98 | ||
| P/S | 1.74 | ||
| P/FCF | 31.48 | ||
| P/OCF | 17.12 | ||
| P/B | 3.35 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.04 |
EPS(TTM)7.68
EY6.82%
EPS(NY)8.68
Fwd EY7.71%
FCF(TTM)3.58
FCFY3.18%
OCF(TTM)6.58
OCFY5.84%
SpS64.77
BVpS33.57
TBVpS-2.48
PEG (NY)N/A
PEG (5Y)2.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.57% | ||
| ROE | 13.34% | ||
| ROCE | 12.89% | ||
| ROIC | 9.6% | ||
| ROICexc | 10.66% | ||
| ROICexgc | 23.85% | ||
| OM | 14.41% | ||
| PM (TTM) | 6.92% | ||
| GM | 40.85% | ||
| FCFM | 5.52% |
ROA(3y)5.52%
ROA(5y)5.74%
ROE(3y)16.08%
ROE(5y)17.95%
ROIC(3y)9.72%
ROIC(5y)9.04%
ROICexc(3y)10.67%
ROICexc(5y)9.96%
ROICexgc(3y)25.22%
ROICexgc(5y)23.45%
ROCE(3y)13.06%
ROCE(5y)12.2%
ROICexcg growth 3Y16.9%
ROICexcg growth 5Y3.89%
ROICexc growth 3Y16.85%
ROICexc growth 5Y2.21%
OM growth 3Y12.52%
OM growth 5Y2.91%
PM growth 3Y-6.31%
PM growth 5Y-3.01%
GM growth 3Y2.4%
GM growth 5Y-0.56%
F-Score4
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 9.09 | ||
| Debt/EBITDA | 2.3 | ||
| Cap/Depr | 143.13% | ||
| Cap/Sales | 4.63% | ||
| Interest Coverage | 9.16 | ||
| Cash Conversion | 57.54% | ||
| Profit Quality | 79.82% | ||
| Current Ratio | 1.42 | ||
| Quick Ratio | 1.04 | ||
| Altman-Z | 3.58 |
F-Score4
WACC8.46%
ROIC/WACC1.14
Cap/Depr(3y)112.81%
Cap/Depr(5y)92.86%
Cap/Sales(3y)3.75%
Cap/Sales(5y)3.13%
Profit Quality(3y)84.21%
Profit Quality(5y)101.19%
High Growth Momentum
Growth
EPS 1Y (TTM)-3.52%
EPS 3Y6.16%
EPS 5Y5.46%
EPS Q2Q%-11.2%
EPS Next Y-1.65%
EPS Next 2Y3.49%
EPS Next 3Y5.44%
EPS Next 5Y6.79%
Revenue 1Y (TTM)-19.23%
Revenue growth 3Y-1.94%
Revenue growth 5Y0.91%
Sales Q2Q%-12.49%
Revenue Next Year-11.08%
Revenue Next 2Y-4.29%
Revenue Next 3Y-1.91%
Revenue Next 5Y-0.12%
EBIT growth 1Y-7.95%
EBIT growth 3Y10.34%
EBIT growth 5Y3.84%
EBIT Next Year12.22%
EBIT Next 3Y7.93%
EBIT Next 5Y7.39%
FCF growth 1Y-34.07%
FCF growth 3Y-16.27%
FCF growth 5Y-15.96%
OCF growth 1Y-13.72%
OCF growth 3Y-3.13%
OCF growth 5Y-7.35%