PPG INDUSTRIES INC (PPG) Stock Fundamental Analysis
NYSE:PPG - New York Stock Exchange, Inc. - US6935061076 - Common Stock - Currency: USD
Overall PPG gets a fundamental rating of 6 out of 10. We evaluated PPG against 85 industry peers in the Chemicals industry. While PPG belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. PPG is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year PPG was profitable.
In the past year PPG had a positive cash flow from operations.
PPG had positive earnings in each of the past 5 years.
PPG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.74%, PPG is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
Looking at the Return On Equity, with a value of 16.45%, PPG belongs to the top of the industry, outperforming 84.71% of the companies in the same industry.
The Return On Invested Capital of PPG (11.66%) is better than 88.24% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PPG is above the industry average of 7.13%.
The 3 year average ROIC (9.72%) for PPG is below the current ROIC(11.66%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.74% | ||
| ROE | 16.45% | ||
| ROIC | 11.66% |
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
With a decent Profit Margin value of 7.04%, PPG is doing good in the industry, outperforming 76.47% of the companies in the same industry.
PPG's Profit Margin has declined in the last couple of years.
PPG's Operating Margin of 14.24% is fine compared to the rest of the industry. PPG outperforms 75.29% of its industry peers.
PPG's Operating Margin has improved in the last couple of years.
The Gross Margin of PPG (41.61%) is better than 87.06% 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 | 14.24% | ||
| PM (TTM) | 7.04% | ||
| GM | 41.61% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so PPG is still creating some value.
PPG has less shares outstanding than it did 1 year ago.
The number of shares outstanding for PPG has been reduced compared to 5 years ago.
Compared to 1 year ago, PPG has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.99 indicates that PPG is not in any danger for bankruptcy at the moment.
PPG has a Altman-Z score of 3.99. This is amongst the best in the industry. PPG outperforms 87.06% of its industry peers.
The Debt to FCF ratio of PPG is 8.32, which is on the high side as it means it would take PPG, 8.32 years of fcf income to pay off all of its debts.
PPG's Debt to FCF ratio of 8.32 is fine compared to the rest of the industry. PPG outperforms 62.35% of its industry peers.
A Debt/Equity ratio of 0.72 indicates that PPG is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.72, PPG perfoms like the industry average, outperforming 45.88% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 8.32 | ||
| Altman-Z | 3.99 |
ROIC/WACC1.43
WACC8.14%
2.3 Liquidity
PPG has a Current Ratio of 1.31. This is a normal value and indicates that PPG is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of PPG (1.31) is worse than 71.76% of its industry peers.
PPG has a Quick Ratio of 1.31. This is a bad value and indicates that PPG is not financially healthy enough and could expect problems in meeting its short term obligations.
PPG has a Quick ratio of 0.94. This is in the lower half of the industry: PPG underperforms 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.61% over the past year.
PPG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.46% yearly.
The Revenue for PPG has decreased by -13.16% in the past year. This is quite bad
The Revenue has been growing slightly by 0.91% on average over the past years.
EPS 1Y (TTM)5.61%
EPS 3Y6.16%
EPS 5Y5.46%
EPS Q2Q%5.23%
Revenue 1Y (TTM)-13.16%
Revenue growth 3Y-1.94%
Revenue growth 5Y0.91%
Sales Q2Q%-14.28%
3.2 Future
PPG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.19% yearly.
The Revenue is expected to grow by 1.42% on average over the next years.
EPS Next Y-2.67%
EPS Next 2Y2.88%
EPS Next 3Y5.06%
EPS Next 5Y5.19%
Revenue Next Year-11.6%
Revenue Next 2Y-4.6%
Revenue Next 3Y-1.93%
Revenue Next 5Y1.42%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 12.71 indicates a correct valuation of PPG.
Based on the Price/Earnings ratio, PPG is valued a bit cheaper than the industry average as 69.41% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.87. PPG is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 13.06 indicates a correct valuation of PPG.
Based on the Price/Forward Earnings ratio, PPG is valued a bit cheaper than the industry average as 65.88% of the companies are valued more expensively.
PPG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.38, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.71 | ||
| Fwd PE | 13.06 |
4.2 Price Multiples
PPG's Enterprise Value to EBITDA is on the same level as the industry average.
PPG's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.43 | ||
| EV/EBITDA | 10.09 |
4.3 Compensation for Growth
The excellent profitability rating of PPG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.33
EPS Next 2Y2.88%
EPS Next 3Y5.06%
5. Dividend
5.1 Amount
PPG has a Yearly Dividend Yield of 2.61%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.80, PPG pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.46, PPG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
5.2 History
The dividend of PPG is nicely growing with an annual growth rate of 6.16%!
PPG has been paying a dividend for at least 10 years, so it has 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)6.16%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
PPG pays out 55.73% of its income as dividend. This is a bit on the high side, but may be sustainable.
PPG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP55.73%
EPS Next 2Y2.88%
EPS Next 3Y5.06%
102.96
+0.39 (+0.38%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners88.78%
Inst Owner Change0.4%
Ins Owners0.1%
Ins Owner Change0.92%
Market Cap23.37B
Analysts71.88
Price Target129.14 (25.43%)
Short Float %1.49%
Short Ratio1.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
Yearly Dividend2.67
Dividend Growth(5Y)6.16%
DP55.73%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.59%
Min EPS beat(2)-3.35%
Max EPS beat(2)-1.83%
EPS beat(4)0
Avg EPS beat(4)-1.61%
Min EPS beat(4)-3.35%
Max EPS beat(4)-0.3%
EPS beat(8)4
Avg EPS beat(8)2.78%
EPS beat(12)7
Avg EPS beat(12)4.53%
EPS beat(16)10
Avg EPS beat(16)4.61%
Revenue beat(2)0
Avg Revenue beat(2)-5.7%
Min Revenue beat(2)-8.85%
Max Revenue beat(2)-2.56%
Revenue beat(4)0
Avg Revenue beat(4)-4.68%
Min Revenue beat(4)-8.85%
Max Revenue beat(4)-2.56%
Revenue beat(8)1
Avg Revenue beat(8)-2.55%
Revenue beat(12)3
Avg Revenue beat(12)-1.63%
Revenue beat(16)6
Avg Revenue beat(16)-0.66%
PT rev (1m)-5.2%
PT rev (3m)-13.8%
EPS NQ rev (1m)-1.17%
EPS NQ rev (3m)-17.65%
EPS NY rev (1m)-1.4%
EPS NY rev (3m)-11.7%
Revenue NQ rev (1m)0.11%
Revenue NQ rev (3m)-8.3%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)-4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.71 | ||
| Fwd PE | 13.06 | ||
| P/S | 1.47 | ||
| P/FCF | 33.43 | ||
| P/OCF | 16.46 | ||
| P/B | 3.44 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.09 |
EPS(TTM)8.1
EY7.87%
EPS(NY)7.88
Fwd EY7.66%
FCF(TTM)3.08
FCFY2.99%
OCF(TTM)6.26
OCFY6.08%
SpS69.81
BVpS29.89
TBVpS-3.64
PEG (NY)N/A
PEG (5Y)2.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.74% | ||
| ROE | 16.45% | ||
| ROCE | 15.65% | ||
| ROIC | 11.66% | ||
| ROICexc | 12.87% | ||
| ROICexgc | 30.82% | ||
| OM | 14.24% | ||
| PM (TTM) | 7.04% | ||
| GM | 41.61% | ||
| FCFM | 4.41% |
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-Score6
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 8.32 | ||
| Debt/EBITDA | 1.78 | ||
| Cap/Depr | 146.54% | ||
| Cap/Sales | 4.55% | ||
| Interest Coverage | 9.14 | ||
| Cash Conversion | 51.66% | ||
| Profit Quality | 62.63% | ||
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 3.99 |
F-Score6
WACC8.14%
ROIC/WACC1.43
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)5.61%
EPS 3Y6.16%
EPS 5Y5.46%
EPS Q2Q%5.23%
EPS Next Y-2.67%
EPS Next 2Y2.88%
EPS Next 3Y5.06%
EPS Next 5Y5.19%
Revenue 1Y (TTM)-13.16%
Revenue growth 3Y-1.94%
Revenue growth 5Y0.91%
Sales Q2Q%-14.28%
Revenue Next Year-11.6%
Revenue Next 2Y-4.6%
Revenue Next 3Y-1.93%
Revenue Next 5Y1.42%
EBIT growth 1Y-0.04%
EBIT growth 3Y10.34%
EBIT growth 5Y3.84%
EBIT Next Year14.92%
EBIT Next 3Y8.81%
EBIT Next 5Y7.18%
FCF growth 1Y-62.46%
FCF growth 3Y-16.27%
FCF growth 5Y-15.96%
OCF growth 1Y-41.1%
OCF growth 3Y-3.13%
OCF growth 5Y-7.35%