PPG INDUSTRIES INC (PPG) Stock Fundamental Analysis
NYSE:PPG - New York Stock Exchange, Inc. - US6935061076 - Common Stock - Currency: USD
PPG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals 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
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.
PPG had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of PPG (6.80%) is better than 84.34% of its industry peers.
PPG has a Return On Equity of 19.08%. This is amongst the best in the industry. PPG outperforms 86.75% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.22%, PPG belongs to the top of the industry, outperforming 86.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.8% | ||
| ROE | 19.08% | ||
| ROIC | 10.22% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
The Profit Margin of PPG (8.24%) is better than 78.31% of its industry peers.
In the last couple of years the Profit Margin of PPG has declined.
With a decent Operating Margin value of 12.83%, PPG is doing good in the industry, outperforming 72.29% of the companies in the same industry.
In the last couple of years the Operating Margin of PPG has grown nicely.
PPG's Gross Margin of 42.47% is amongst the best of the industry. PPG outperforms 85.54% of its industry peers.
PPG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.83% | ||
| PM (TTM) | 8.24% | ||
| GM | 42.47% |
OM growth 3Y13.02%
OM growth 5Y3.18%
PM growth 3Y-6.31%
PM growth 5Y-3.01%
GM growth 3Y2.16%
GM growth 5Y-0.7%
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.
There is no outstanding debt for PPG. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
An Altman-Z score of 3.89 indicates that PPG is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 3.89, PPG belongs to the best of the industry, outperforming 84.34% of the companies in the same industry.
The Debt to FCF ratio of PPG is 5.06, which is a neutral value as it means it would take PPG, 5.06 years of fcf income to pay off all of its debts.
PPG has a Debt to FCF ratio of 5.06. This is in the better half of the industry: PPG outperforms 73.49% of its industry peers.
PPG has a Debt/Equity ratio of 0.79. This is a neutral value indicating PPG is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.79, PPG is in line with its industry, outperforming 44.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 5.06 | ||
| Altman-Z | 3.89 |
ROIC/WACC1.24
WACC8.27%
2.3 Liquidity
PPG has a Current Ratio of 1.58. 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 (1.58) is worse than 66.27% of its industry peers.
PPG has a Quick Ratio of 1.13. 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 Quick ratio of 1.13. This is comparable to the rest of the industry: PPG outperforms 43.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.58 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.61% over the past 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.
The Revenue has decreased by -4.59% in the past year.
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)-4.59%
Revenue growth 3Y-1.94%
Revenue growth 5Y0.91%
Sales Q2Q%-14.28%
3.2 Future
The Earnings Per Share is expected to grow by 5.21% on average over the next years.
PPG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.33% yearly.
EPS Next Y-1.12%
EPS Next 2Y4.2%
EPS Next 3Y6.31%
EPS Next 5Y5.21%
Revenue Next Year-11.41%
Revenue Next 2Y-4.39%
Revenue Next 3Y-1.64%
Revenue Next 5Y2.33%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 13.98, the valuation of PPG can be described as correct.
PPG's Price/Earnings ratio is a bit cheaper when compared to the industry. PPG is cheaper than 72.29% of the companies in the same industry.
PPG's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.43.
The Price/Forward Earnings ratio is 14.14, which indicates a correct valuation of PPG.
Based on the Price/Forward Earnings ratio, PPG is valued a bit cheaper than 65.06% 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 22.67.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.98 | ||
| Fwd PE | 14.14 |
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 a bit cheaper when compared to the industry. PPG is cheaper than 66.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.51 | ||
| EV/EBITDA | 10.93 |
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)2.56
EPS Next 2Y4.2%
EPS Next 3Y6.31%
5. Dividend
5.1 Amount
PPG has a Yearly Dividend Yield of 2.39%. 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 3.37.
PPG's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
5.2 History
On average, the dividend of PPG grows each year by 6.45%, 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 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 Years34
Div Non Decr Years34
5.3 Sustainability
41.52% 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.
DP41.52%
EPS Next 2Y4.2%
EPS Next 3Y6.31%
113.22
-0.46 (-0.4%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners88.78%
Inst Owner Change3%
Ins Owners0.1%
Ins Owner Change0.73%
Market Cap26.27B
Analysts74.38
Price Target137.8 (21.71%)
Short Float %1.94%
Short Ratio2.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
Yearly Dividend2.54
Dividend Growth(5Y)6.45%
DP41.52%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.06%
Min EPS beat(2)-1.83%
Max EPS beat(2)-0.3%
EPS beat(4)1
Avg EPS beat(4)-0.48%
Min EPS beat(4)-1.83%
Max EPS beat(4)1.17%
EPS beat(8)5
Avg EPS beat(8)4.1%
EPS beat(12)8
Avg EPS beat(12)5.37%
EPS beat(16)10
Avg EPS beat(16)4.78%
Revenue beat(2)0
Avg Revenue beat(2)-3.08%
Min Revenue beat(2)-3.6%
Max Revenue beat(2)-2.56%
Revenue beat(4)1
Avg Revenue beat(4)-2.25%
Min Revenue beat(4)-3.73%
Max Revenue beat(4)0.88%
Revenue beat(8)2
Avg Revenue beat(8)-1.3%
Revenue beat(12)4
Avg Revenue beat(12)-0.65%
Revenue beat(16)7
Avg Revenue beat(16)0.12%
PT rev (1m)-5.98%
PT rev (3m)-8.64%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.82%
EPS NY rev (1m)-8.64%
EPS NY rev (3m)-10.42%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.75%
Revenue NY rev (1m)-3.8%
Revenue NY rev (3m)-5.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.98 | ||
| Fwd PE | 14.14 | ||
| P/S | 1.46 | ||
| P/FCF | 20.51 | ||
| P/OCF | 13.32 | ||
| P/B | 3.37 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.93 |
EPS(TTM)8.1
EY7.15%
EPS(NY)8.01
Fwd EY7.07%
FCF(TTM)5.52
FCFY4.88%
OCF(TTM)8.5
OCFY7.51%
SpS77.72
BVpS33.57
TBVpS-2.13
PEG (NY)N/A
PEG (5Y)2.56
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.8% | ||
| ROE | 19.08% | ||
| ROCE | 13.72% | ||
| ROIC | 10.22% | ||
| ROICexc | 11.09% | ||
| ROICexgc | 23.74% | ||
| OM | 12.83% | ||
| PM (TTM) | 8.24% | ||
| GM | 42.47% | ||
| FCFM | 7.1% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y13.02%
OM growth 5Y3.18%
PM growth 3Y-6.31%
PM growth 5Y-3.01%
GM growth 3Y2.16%
GM growth 5Y-0.7%
F-Score7
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 5.06 | ||
| Debt/EBITDA | 2.14 | ||
| Cap/Depr | 124.73% | ||
| Cap/Sales | 3.83% | ||
| Interest Coverage | 10.06 | ||
| Cash Conversion | 68.78% | ||
| Profit Quality | 86.2% | ||
| Current Ratio | 1.58 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | 3.89 |
F-Score7
WACC8.27%
ROIC/WACC1.24
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)5.61%
EPS 3Y6.16%
EPS 5Y5.46%
EPS Q2Q%5.23%
EPS Next Y-1.12%
EPS Next 2Y4.2%
EPS Next 3Y6.31%
EPS Next 5Y5.21%
Revenue 1Y (TTM)-4.59%
Revenue growth 3Y-1.94%
Revenue growth 5Y0.91%
Sales Q2Q%-14.28%
Revenue Next Year-11.41%
Revenue Next 2Y-4.39%
Revenue Next 3Y-1.64%
Revenue Next 5Y2.33%
EBIT growth 1Y8.74%
EBIT growth 3Y10.83%
EBIT growth 5Y4.12%
EBIT Next Year17.92%
EBIT Next 3Y9.96%
EBIT Next 5Y6.8%
FCF growth 1Y-18.36%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-6.1%
OCF growth 3YN/A
OCF growth 5YN/A