PPG INDUSTRIES INC (PPG) Stock Fundamental Analysis
NYSE:PPG - New York Stock Exchange, Inc. - US6935061076 - Common Stock - Currency: USD
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. While PPG belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. PPG has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year PPG was profitable.
PPG had a positive operating cash flow in the past year.
PPG had positive earnings in each of the past 5 years.
Each year in the past 5 years PPG had a positive operating cash flow.
1.2 Ratios
The Return On Assets of PPG (5.15%) is better than 77.65% of its industry peers.
The Return On Equity of PPG (15.72%) is better than 85.88% of its industry peers.
PPG has a Return On Invested Capital of 10.65%. This is amongst the best in the industry. PPG outperforms 85.88% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PPG is above the industry average of 7.01%.
The last Return On Invested Capital (10.65%) for PPG is above the 3 year average (9.72%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.15% | ||
| ROE | 15.72% | ||
| ROIC | 10.65% |
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 7.16%, PPG is in the better half of the industry, outperforming 75.29% of the companies in the same industry.
PPG's Profit Margin has declined in the last couple of years.
The Operating Margin of PPG (14.38%) is better than 74.12% of its industry peers.
In the last couple of years the Operating Margin of PPG has grown nicely.
PPG has a Gross Margin of 41.19%. This is amongst the best in the industry. PPG outperforms 87.06% of its industry peers.
PPG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.38% | ||
| PM (TTM) | 7.16% | ||
| GM | 41.19% |
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.
The number of shares outstanding for PPG has been reduced compared to 1 year ago.
Compared to 5 years ago, PPG has less shares outstanding
The debt/assets ratio for PPG is higher compared to a year ago.
2.2 Solvency
PPG has an Altman-Z score of 3.74. This indicates that PPG is financially healthy and has little risk of bankruptcy at the moment.
PPG has a Altman-Z score of 3.74. This is amongst the best in the industry. PPG outperforms 83.53% of its industry peers.
The Debt to FCF ratio of PPG is 9.22, which is on the high side as it means it would take PPG, 9.22 years of fcf income to pay off all of its debts.
PPG has a better Debt to FCF ratio (9.22) than 63.53% of its industry peers.
A Debt/Equity ratio of 0.81 indicates that PPG is somewhat dependend on debt financing.
PPG has a Debt to Equity ratio (0.81) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.81 | ||
| Debt/FCF | 9.22 | ||
| Altman-Z | 3.74 |
ROIC/WACC1.25
WACC8.5%
2.3 Liquidity
PPG has a Current Ratio of 1.35. This is a normal value and indicates that PPG is financially healthy and should not expect problems in meeting its short term obligations.
PPG's Current ratio of 1.35 is on the low side compared to the rest of the industry. PPG is outperformed by 74.12% of its industry peers.
PPG has a Quick Ratio of 1.35. This is a bad value and indicates that PPG is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of PPG (0.99) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.24% 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.
Looking at the last year, PPG shows a very negative growth in Revenue. The Revenue has decreased by -16.28% in the last year.
Measured over the past years, PPG shows a small growth in Revenue. The Revenue has been growing by 0.91% on average per year.
EPS 1Y (TTM)3.24%
EPS 3Y6.16%
EPS 5Y5.46%
EPS Q2Q%-7.53%
Revenue 1Y (TTM)-16.28%
Revenue growth 3Y-1.94%
Revenue growth 5Y0.91%
Sales Q2Q%-14.54%
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.
Based on estimates for the next years, PPG will show a small growth in Revenue. The Revenue will grow by 1.42% on average per year.
EPS Next Y-1.71%
EPS Next 2Y3.25%
EPS Next 3Y5.22%
EPS Next 5Y5.19%
Revenue Next Year-11.43%
Revenue Next 2Y-4.48%
Revenue Next 3Y-2%
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
The Price/Earnings ratio is 14.30, which indicates a correct valuation of PPG.
68.24% of the companies in the same industry are more expensive than PPG, based on the Price/Earnings ratio.
PPG is valuated rather cheaply when we compare the Price/Earnings ratio to 26.60, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 13.18, which indicates a correct valuation of PPG.
61.18% of the companies in the same industry are more expensive than PPG, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.43. PPG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.3 | ||
| Fwd PE | 13.18 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as PPG.
The rest of the industry has a similar Price/Free Cash Flow ratio as PPG.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.78 | ||
| EV/EBITDA | 11.73 |
4.3 Compensation for Growth
PPG has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.62
EPS Next 2Y3.25%
EPS Next 3Y5.22%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.41%, PPG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.70, PPG pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, PPG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
5.2 History
On average, the dividend of PPG grows each year by 6.16%, which is quite nice.
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)6.16%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
57.21% of the earnings are spent on dividend by PPG. 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.
DP57.21%
EPS Next 2Y3.25%
EPS Next 3Y5.22%
113.79
-0.47 (-0.41%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners88.78%
Inst Owner Change-3.61%
Ins Owners0.1%
Ins Owner Change1.17%
Market Cap25.83B
Analysts70.63
Price Target130.14 (14.37%)
Short Float %1.53%
Short Ratio1.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
Yearly Dividend2.67
Dividend Growth(5Y)6.16%
DP57.21%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.86%
Min EPS beat(2)-3.35%
Max EPS beat(2)5.06%
EPS beat(4)1
Avg EPS beat(4)-0.1%
Min EPS beat(4)-3.35%
Max EPS beat(4)5.06%
EPS beat(8)4
Avg EPS beat(8)1.24%
EPS beat(12)7
Avg EPS beat(12)3.14%
EPS beat(16)10
Avg EPS beat(16)3.74%
Revenue beat(2)0
Avg Revenue beat(2)-4.69%
Min Revenue beat(2)-8.85%
Max Revenue beat(2)-0.54%
Revenue beat(4)0
Avg Revenue beat(4)-3.89%
Min Revenue beat(4)-8.85%
Max Revenue beat(4)-0.54%
Revenue beat(8)1
Avg Revenue beat(8)-2.45%
Revenue beat(12)2
Avg Revenue beat(12)-1.72%
Revenue beat(16)5
Avg Revenue beat(16)-0.97%
PT rev (1m)-4.47%
PT rev (3m)-11.21%
EPS NQ rev (1m)-1.86%
EPS NQ rev (3m)-3.62%
EPS NY rev (1m)0.99%
EPS NY rev (3m)-0.84%
Revenue NQ rev (1m)0.57%
Revenue NQ rev (3m)0.26%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)-1.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.3 | ||
| Fwd PE | 13.18 | ||
| P/S | 1.7 | ||
| P/FCF | 32.78 | ||
| P/OCF | 17.67 | ||
| P/B | 3.73 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.73 |
EPS(TTM)7.96
EY7%
EPS(NY)8.63
Fwd EY7.59%
FCF(TTM)3.47
FCFY3.05%
OCF(TTM)6.44
OCFY5.66%
SpS67.05
BVpS30.52
TBVpS-3.66
PEG (NY)N/A
PEG (5Y)2.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.15% | ||
| ROE | 15.72% | ||
| ROCE | 14.3% | ||
| ROIC | 10.65% | ||
| ROICexc | 12.15% | ||
| ROICexgc | 28.79% | ||
| OM | 14.38% | ||
| PM (TTM) | 7.16% | ||
| GM | 41.19% | ||
| FCFM | 5.18% |
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-Score5
Asset Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.81 | ||
| Debt/FCF | 9.22 | ||
| Debt/EBITDA | 2.1 | ||
| Cap/Depr | 142.8% | ||
| Cap/Sales | 4.43% | ||
| Interest Coverage | 9.28 | ||
| Cash Conversion | 54.94% | ||
| Profit Quality | 72.36% | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 3.74 |
F-Score5
WACC8.5%
ROIC/WACC1.25
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)3.24%
EPS 3Y6.16%
EPS 5Y5.46%
EPS Q2Q%-7.53%
EPS Next Y-1.71%
EPS Next 2Y3.25%
EPS Next 3Y5.22%
EPS Next 5Y5.19%
Revenue 1Y (TTM)-16.28%
Revenue growth 3Y-1.94%
Revenue growth 5Y0.91%
Sales Q2Q%-14.54%
Revenue Next Year-11.43%
Revenue Next 2Y-4.48%
Revenue Next 3Y-2%
Revenue Next 5Y1.42%
EBIT growth 1Y-2.93%
EBIT growth 3Y10.34%
EBIT growth 5Y3.84%
EBIT Next Year14.92%
EBIT Next 3Y8.81%
EBIT Next 5Y7.18%
FCF growth 1Y-13.22%
FCF growth 3Y-16.27%
FCF growth 5Y-15.96%
OCF growth 1Y8.14%
OCF growth 3Y-3.13%
OCF growth 5Y-7.35%