PPG INDUSTRIES INC (PPG)

US6935061076 - Common Stock

144.54  +2.72 (+1.92%)

After market: 144.54 0 (0%)

Fundamental Rating

6

Taking everything into account, PPG scores 6 out of 10 in our fundamental rating. PPG was compared to 85 industry peers in the Chemicals industry. PPG scores excellent on profitability, but there are some minor concerns on its financial health. PPG is not valued too expensively and it also shows a decent growth rate.



7

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.
PPG had positive earnings in each of the past 5 years.
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 5.87%, PPG is in the better half of the industry, outperforming 72.94% of the companies in the same industry.
PPG has a Return On Equity of 16.22%. This is in the better half of the industry: PPG outperforms 76.47% of its industry peers.
PPG has a Return On Invested Capital of 10.30%. This is amongst the best in the industry. PPG outperforms 83.53% 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 7.53%.
The 3 year average ROIC (8.56%) for PPG is below the current ROIC(10.30%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 5.87%
ROE 16.22%
ROIC 10.3%
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

With a decent Profit Margin value of 6.96%, PPG is doing good in the industry, outperforming 69.41% of the companies in the same industry.
PPG's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 12.38%, PPG is in the better half of the industry, outperforming 70.59% of the companies in the same industry.
PPG's Operating Margin has been stable in the last couple of years.
The Gross Margin of PPG (41.11%) is better than 84.71% of its industry peers.
PPG's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 12.38%
PM (TTM) 6.96%
GM 41.11%
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

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so PPG is still creating some value.
The number of shares outstanding for PPG remains at a similar level compared to 1 year ago.
The number of shares outstanding for PPG has been reduced compared to 5 years ago.
PPG has a better debt/assets ratio than last year.

2.2 Solvency

PPG has an Altman-Z score of 4.19. This indicates that PPG is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 4.19, PPG belongs to the best of the industry, outperforming 85.88% of the companies in the same industry.
PPG has a debt to FCF ratio of 3.25. This is a good value and a sign of high solvency as PPG would need 3.25 years to pay back of all of its debts.
PPG has a Debt to FCF ratio of 3.25. This is amongst the best in the industry. PPG outperforms 81.18% of its industry peers.
PPG has a Debt/Equity ratio of 0.73. This is a neutral value indicating PPG is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.73, PPG is in line with its industry, outperforming 43.53% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.73
Debt/FCF 3.25
Altman-Z 4.19
ROIC/WACC1.31
WACC7.87%

2.3 Liquidity

PPG has a Current Ratio of 1.47. This is a normal value and indicates that PPG is financially healthy and should not expect problems in meeting its short term obligations.
PPG has a worse Current ratio (1.47) than 76.47% of its industry peers.
A Quick Ratio of 1.05 indicates that PPG should not have too much problems paying its short term obligations.
PPG's Quick ratio of 1.05 is on the low side compared to the rest of the industry. PPG is outperformed by 64.71% of its industry peers.
Industry RankSector Rank
Current Ratio 1.47
Quick Ratio 1.05

5

3. Growth

3.1 Past

PPG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.57%, which is quite impressive.
The Earnings Per Share has been growing slightly by 5.42% on average over the past years.
Looking at the last year, PPG shows a small growth in Revenue. The Revenue has grown by 3.37% in the last year.
PPG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.48% yearly.
EPS 1Y (TTM)26.57%
EPS 3Y10.4%
EPS 5Y5.42%
EPS growth Q2Q25.41%
Revenue 1Y (TTM)3.37%
Revenue growth 3Y9.67%
Revenue growth 5Y3.48%
Revenue growth Q2Q3.94%

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 7.46% on average per year.
The Revenue is expected to grow by 3.01% on average over the next years.
EPS Next Y11.91%
EPS Next 2Y10.92%
EPS Next 3Y7.51%
EPS Next 5Y7.46%
Revenue Next Year2.89%
Revenue Next 2Y3.21%
Revenue Next 3Y3.47%
Revenue Next 5Y3.01%

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 accelerating.
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

The Price/Earnings ratio is 18.84, which indicates a rather expensive current valuation of PPG.
Based on the Price/Earnings ratio, PPG is valued a bit cheaper than 63.53% of the companies in the same industry.
PPG is valuated rather cheaply when we compare the Price/Earnings ratio to 26.42, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 16.84 indicates a correct valuation of PPG.
Based on the Price/Forward Earnings ratio, PPG is valued a bit cheaper than 67.06% of the companies in the same industry.
PPG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.74.
Industry RankSector Rank
PE 18.84
Fwd PE 16.84

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PPG is on the same level as its industry peers.
PPG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PPG is cheaper than 64.71% of the companies in the same industry.
Industry RankSector Rank
P/FCF 18.27
EV/EBITDA 13.64

4.3 Compensation for Growth

PPG's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of PPG may justify a higher PE ratio.
PEG (NY)1.58
PEG (5Y)3.47
EPS Next 2Y10.92%
EPS Next 3Y7.51%

6

5. Dividend

5.1 Amount

PPG has a Yearly Dividend Yield of 1.81%. 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 3.25.
Compared to the average S&P500 Dividend Yield of 2.34, PPG is paying slightly less dividend.
Industry RankSector Rank
Dividend Yield 1.81%

5.2 History

The dividend of PPG is nicely growing with an annual growth rate of 6.45%!
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)6.45%
Div Incr Years19
Div Non Decr Years19

5.3 Sustainability

PPG pays out 47.09% of its income as dividend. This is a bit on the high side, but may be sustainable.
PPG's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP47.09%
EPS Next 2Y10.92%
EPS Next 3Y7.51%

PPG INDUSTRIES INC

NYSE:PPG (3/27/2024, 8:04:00 PM)

After market: 144.54 0 (0%)

144.54

+2.72 (+1.92%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap34.02B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 1.81%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS 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 18.84
Fwd PE 16.84
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)1.58
PEG (5Y)3.47
Profitability
Industry RankSector Rank
ROA 5.87%
ROE 16.22%
ROCE
ROIC
ROICexc
ROICexgc
OM 12.38%
PM (TTM) 6.96%
GM 41.11%
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 Turnover0.84
Health
Industry RankSector Rank
Debt/Equity 0.73
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.47
Quick Ratio 1.05
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)
Growth
EPS 1Y (TTM)26.57%
EPS 3Y10.4%
EPS 5Y
EPS growth Q2Q
EPS Next Y11.91%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.37%
Revenue growth 3Y9.67%
Revenue growth 5Y
Revenue growth 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