PPG INDUSTRIES INC (PPG)
US6935061076 - Common Stock
We assign a fundamental rating of 6 out of 10 to PPG. PPG was compared to 83 industry peers in the Chemicals industry. While PPG has a great profitability rating, there are some minor concerns on its financial health. PPG is valued correctly, but it does not seem to be growing.
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 each of the past 5 years.
1.2 Ratios
PPG has a better Return On Assets (6.80%) than 83.13% of its industry peers.
PPG has a better Return On Equity (19.08%) than 87.95% of its industry peers.
PPG has a better Return On Invested Capital (10.38%) than 87.95% of its industry peers.
PPG had an Average Return On Invested Capital over the past 3 years of 8.56%. This is in line with the industry average of 7.24%.
The last Return On Invested Capital (10.38%) for PPG is above the 3 year average (8.56%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.8% | ||
| ROE | 19.08% | ||
| ROIC | 10.38% |
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
PPG has a Profit Margin of 8.24%. This is in the better half of the industry: PPG outperforms 77.11% of its industry peers.
In the last couple of years the Profit Margin of PPG has declined.
Looking at the Operating Margin, with a value of 12.83%, PPG is in the better half of the industry, outperforming 72.29% 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 (42.47%) is better than 84.34% 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 | 12.83% | ||
| PM (TTM) | 8.24% | ||
| GM | 42.47% |
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%
2. Health
2.1 Basic Checks
PPG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
PPG has about the same amout of 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 an improved debt to assets ratio.
2.2 Solvency
PPG has an Altman-Z score of 3.97. This indicates that PPG is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.97, PPG belongs to the top of the industry, outperforming 86.75% 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 68.67% of its industry peers.
A Debt/Equity ratio of 0.79 indicates that PPG is somewhat dependend on debt financing.
PPG's Debt to Equity ratio of 0.79 is in line compared to the rest of the industry. PPG outperforms 45.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 5.06 | ||
| Altman-Z | 3.97 |
ROIC/WACC1.3
WACC7.98%
2.3 Liquidity
A Current Ratio of 1.58 indicates that PPG should not have too much problems paying its short term obligations.
The Current ratio of PPG (1.58) is worse than 66.27% of its industry peers.
A Quick Ratio of 1.13 indicates that PPG should not have too much problems paying its short term obligations.
PPG's Quick ratio of 1.13 is in line compared to the rest of the industry. PPG outperforms 40.96% 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 grown by an nice 8.97% over the past year.
The Earnings Per Share has been growing slightly by 5.42% on average over the past years.
PPG shows a decrease in Revenue. In the last year, the revenue decreased by -0.28%.
The Revenue has been growing slightly by 3.48% on average over the past years.
EPS 1Y (TTM)8.97%
EPS 3Y10.4%
EPS 5Y5.42%
EPS Q2Q%2.9%
Revenue 1Y (TTM)-0.28%
Revenue growth 3Y9.67%
Revenue growth 5Y3.48%
Sales Q2Q%-1.49%
3.2 Future
The Earnings Per Share is expected to grow by 6.36% 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 0.23% yearly.
EPS Next Y7.47%
EPS Next 2Y7.89%
EPS Next 3Y8.65%
EPS Next 5Y6.36%
Revenue Next Year-2.12%
Revenue Next 2Y-4.6%
Revenue Next 3Y-1.04%
Revenue Next 5Y0.23%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 15.08, which indicates a correct valuation of PPG.
PPG's Price/Earnings ratio is a bit cheaper when compared to the industry. PPG is cheaper than 69.88% of the companies in the same industry.
PPG's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.54.
A Price/Forward Earnings ratio of 13.55 indicates a correct valuation of PPG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PPG indicates a somewhat cheap valuation: PPG is cheaper than 62.65% of the companies listed in the same industry.
PPG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.99, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.08 | ||
| Fwd PE | 13.55 |
4.2 Price Multiples
PPG's Enterprise Value to EBITDA ratio is in line with the industry average.
PPG's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.91 | ||
| EV/EBITDA | 11.56 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PPG does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of PPG may justify a higher PE ratio.
PEG (NY)2.02
PEG (5Y)2.78
EPS Next 2Y7.89%
EPS Next 3Y8.65%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.28%, PPG has a reasonable but not impressive dividend return.
PPG's Dividend Yield is a higher than the industry average which is at 3.35.
PPG's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.28% |
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.
PPG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP41.52%
EPS Next 2Y7.89%
EPS Next 3Y8.65%
PPG INDUSTRIES INC
NYSE:PPG (12/24/2024, 7:32:30 PM)
After market: 120.98 0 (0%)120.98
+0.83 (+0.69%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners85.14%
Inst Owner Change-0.15%
Ins Owners0.1%
Ins Owner Change-0.14%
Market Cap28.07B
Analysts75
Price Target150.79 (24.64%)
Short Float %1.35%
Short Ratio1.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.28% |
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)-1.2%
PT rev (3m)-1.98%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.36%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-0.92%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-8.87%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-2.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.08 | ||
| Fwd PE | 13.55 | ||
| P/S | 1.56 | ||
| P/FCF | 21.91 | ||
| P/OCF | 14.23 | ||
| P/B | 3.6 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.56 |
EPS(TTM)8.02
EY6.63%
EPS(NY)8.93
Fwd EY7.38%
FCF(TTM)5.52
FCFY4.56%
OCF(TTM)8.5
OCFY7.03%
SpS77.72
BVpS33.57
TBVpS-2.13
PEG (NY)2.02
PEG (5Y)2.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.8% | ||
| ROE | 19.08% | ||
| ROCE | 13.72% | ||
| ROIC | 10.38% | ||
| ROICexc | 11.26% | ||
| ROICexgc | 24.11% | ||
| OM | 12.83% | ||
| PM (TTM) | 8.24% | ||
| GM | 42.47% | ||
| FCFM | 7.1% |
ROA(3y)5.85%
ROA(5y)6%
ROE(3y)18.22%
ROE(5y)19.36%
ROIC(3y)8.56%
ROIC(5y)8.98%
ROICexc(3y)9.3%
ROICexc(5y)9.89%
ROICexgc(3y)21.91%
ROICexgc(5y)22.84%
ROCE(3y)11.31%
ROCE(5y)11.93%
ROICexcg growth 3Y5.76%
ROICexcg growth 5Y-1.8%
ROICexc growth 3Y4.93%
ROICexc growth 5Y-2.22%
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%
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 | 3.97 |
F-Score7
WACC7.98%
ROIC/WACC1.3
Cap/Depr(3y)86.01%
Cap/Depr(5y)79.71%
Cap/Sales(3y)2.72%
Cap/Sales(5y)2.62%
Profit Quality(3y)90.92%
Profit Quality(5y)115.48%
High Growth Momentum
Growth
EPS 1Y (TTM)8.97%
EPS 3Y10.4%
EPS 5Y5.42%
EPS Q2Q%2.9%
EPS Next Y7.47%
EPS Next 2Y7.89%
EPS Next 3Y8.65%
EPS Next 5Y6.36%
Revenue 1Y (TTM)-0.28%
Revenue growth 3Y9.67%
Revenue growth 5Y3.48%
Sales Q2Q%-1.49%
Revenue Next Year-2.12%
Revenue Next 2Y-4.6%
Revenue Next 3Y-1.04%
Revenue Next 5Y0.23%
EBIT growth 1Y8.74%
EBIT growth 3Y9.5%
EBIT growth 5Y4.66%
EBIT Next Year25.07%
EBIT Next 3Y11.95%
EBIT Next 5Y7.14%
FCF growth 1Y309.27%
FCF growth 3Y1.02%
FCF growth 5Y12.01%
OCF growth 1Y137.02%
OCF growth 3Y4.55%
OCF growth 5Y10.45%