PPG INDUSTRIES INC (PPG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PPG - US6935061076 - Common Stock
112.65 USD
+0.36 (+0.32%)
112.65 USD
0 (0%)
Taking everything into account, PPG scores 5 out of 10 in our fundamental rating. PPG was compared to 83 industry peers in the Chemicals industry. PPG has an excellent profitability rating, but there are some minor concerns on its financial health. PPG has a valuation in line with the averages, but it does not seem to be growing.
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
- PPG's Return On Assets of 4.50% is fine compared to the rest of the industry. PPG outperforms 77.11% of its industry peers.
- PPG has a better Return On Equity (12.77%) than 84.34% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 9.35%, PPG is in the better half of the industry, outperforming 78.31% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for PPG is above the industry average of 6.11%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.5% | ||
| ROE | 12.77% | ||
| ROIC | 9.35% |
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
- PPG has a Profit Margin of 7.05%. This is in the better half of the industry: PPG outperforms 74.70% of its industry peers.
- PPG's Profit Margin has declined in the last couple of years.
- Looking at the Operating Margin, with a value of 14.70%, PPG is in the better half of the industry, outperforming 75.90% of the companies in the same industry.
- In the last couple of years the Operating Margin of PPG has grown nicely.
- The Gross Margin of PPG (40.46%) is better than 83.13% 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 | 14.7% | ||
| PM (TTM) | 7.05% | ||
| GM | 40.46% |
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
- PPG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- PPG has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, PPG has less shares outstanding
- PPG has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 3.59 indicates that PPG is not in any danger for bankruptcy at the moment.
- PPG has a better Altman-Z score (3.59) than 83.13% of its industry peers.
- PPG has a debt to FCF ratio of 10.09. This is a negative value and a sign of low solvency as PPG would need 10.09 years to pay back of all of its debts.
- PPG has a better Debt to FCF ratio (10.09) than 62.65% of its industry peers.
- A Debt/Equity ratio of 0.76 indicates that PPG is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.76, PPG perfoms like the industry average, outperforming 45.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 10.09 | ||
| Altman-Z | 3.59 |
ROIC/WACC0.7
WACC13.42%
2.3 Liquidity
- A Current Ratio of 1.47 indicates that PPG should not have too much problems paying its short term obligations.
- PPG has a Current ratio of 1.47. This is in the lower half of the industry: PPG underperforms 72.29% of its industry peers.
- PPG has a Quick Ratio of 1.08. 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 (1.08) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
- The earnings per share for PPG have decreased by -4.24% in the last 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 -21.65% in the last year.
- The Revenue has been growing slightly by 0.91% on average over the past years.
EPS 1Y (TTM)-4.24%
EPS 3Y6.16%
EPS 5Y5.46%
EPS Q2Q%0%
Revenue 1Y (TTM)-21.65%
Revenue growth 3Y-1.94%
Revenue growth 5Y0.91%
Sales Q2Q%-10.78%
3.2 Future
- The Earnings Per Share is expected to grow by 5.27% on average over the next years.
- PPG is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.10% yearly.
EPS Next Y-4.57%
EPS Next 2Y0.32%
EPS Next 3Y3.27%
EPS Next 5Y5.27%
Revenue Next Year-11.28%
Revenue Next 2Y-4.67%
Revenue Next 3Y-2.28%
Revenue Next 5Y-0.1%
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- PPG is valuated correctly with a Price/Earnings ratio of 14.67.
- Based on the Price/Earnings ratio, PPG is valued a bit cheaper than 73.49% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.25, PPG is valued a bit cheaper.
- With a Price/Forward Earnings ratio of 13.82, PPG is valued correctly.
- Based on the Price/Forward Earnings ratio, PPG is valued a bit cheaper than the industry average as 69.88% of the companies are valued more expensively.
- PPG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.67 | ||
| Fwd PE | 13.82 |
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 | 34.87 | ||
| EV/EBITDA | 11.96 |
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)2.69
EPS Next 2Y0.32%
EPS Next 3Y3.27%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.49%, PPG has a reasonable but not impressive dividend return.
- PPG's Dividend Yield is a higher than the industry average which is at 2.23.
- PPG's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
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
- 62.85% of the earnings are spent on dividend by PPG. This is not a sustainable payout ratio.
- PPG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP62.85%
EPS Next 2Y0.32%
EPS Next 3Y3.27%
PPG INDUSTRIES INC / PPG FAQ
What is the fundamental rating for PPG stock?
ChartMill assigns a fundamental rating of 5 / 10 to PPG.
What is the valuation status for PPG stock?
ChartMill assigns a valuation rating of 4 / 10 to PPG INDUSTRIES INC (PPG). This can be considered as Fairly Valued.
Can you provide the profitability details for PPG INDUSTRIES INC?
PPG INDUSTRIES INC (PPG) has a profitability rating of 7 / 10.
Can you provide the financial health for PPG stock?
The financial health rating of PPG INDUSTRIES INC (PPG) is 5 / 10.
What is the earnings growth outlook for PPG INDUSTRIES INC?
The Earnings per Share (EPS) of PPG INDUSTRIES INC (PPG) is expected to decline by -4.57% in the next year.