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 6 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 has a decent growth rate and is not valued too expensively.
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.
In the past 5 years PPG always reported a positive cash flow from operatings.
1.2 Ratios
PPG has a better Return On Assets (5.74%) than 82.35% of its industry peers.
PPG's Return On Equity of 16.45% is amongst the best of the industry. PPG outperforms 84.71% of its industry peers.
With an excellent Return On Invested Capital value of 11.66%, PPG belongs to the best of the industry, outperforming 89.41% 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 7.05%.
The 3 year average ROIC (9.72%) for PPG is below the current ROIC(11.66%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.74% | ||
| ROE | 16.45% | ||
| ROIC | 11.66% |
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
The Profit Margin of PPG (7.04%) is better than 77.65% of its industry peers.
In the last couple of years the Profit Margin of PPG has declined.
PPG has a Operating Margin of 14.24%. This is in the better half of the industry: PPG outperforms 75.29% of its industry peers.
PPG's Operating Margin has improved in the last couple of years.
PPG's Gross Margin of 41.61% is amongst the best of 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 | 14.24% | ||
| PM (TTM) | 7.04% | ||
| GM | 41.61% |
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 just above the Cost of Capital (WACC), which means it is 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 3.95. 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 3.95, PPG belongs to the top of the industry, outperforming 85.88% of the companies in the same industry.
PPG has a debt to FCF ratio of 8.32. This is a slightly negative value and a sign of low solvency as PPG would need 8.32 years to pay back of all of its debts.
PPG has a Debt to FCF ratio of 8.32. This is in the better half of the industry: PPG outperforms 62.35% of its industry peers.
PPG has a Debt/Equity ratio of 0.72. This is a neutral value indicating PPG is somewhat dependend on debt financing.
The Debt to Equity ratio of PPG (0.72) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 8.32 | ||
| Altman-Z | 3.95 |
ROIC/WACC1.43
WACC8.18%
2.3 Liquidity
PPG has a Current Ratio of 1.31. This is a normal value and indicates that PPG is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.31, PPG is doing worse than 71.76% of the companies in the same industry.
PPG has a Quick Ratio of 1.31. This is a bad value and indicates that PPG is not financially healthy enough and could expect problems in meeting its short term obligations.
PPG's Quick ratio of 0.94 is on the low side compared to the rest of the industry. PPG is outperformed by 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
PPG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.61%.
The Earnings Per Share has been growing slightly by 5.46% on average over the past years.
Looking at the last year, PPG shows a very negative growth in Revenue. The Revenue has decreased by -13.16% in the last 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)-13.16%
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 5.19% on average over the next years.
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-2.67%
EPS Next 2Y2.88%
EPS Next 3Y5.06%
EPS Next 5Y5.19%
Revenue Next Year-11.49%
Revenue Next 2Y-4.48%
Revenue Next 3Y-1.81%
Revenue Next 5Y1.42%
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 stable.
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 12.27, which indicates a correct valuation of PPG.
Based on the Price/Earnings ratio, PPG is valued a bit cheaper than 70.59% of the companies in the same industry.
PPG is valuated cheaply when we compare the Price/Earnings ratio to 27.63, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 12.61, PPG is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PPG indicates a somewhat cheap valuation: PPG is cheaper than 64.71% of the companies listed in the same industry.
PPG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.27 | ||
| Fwd PE | 12.61 |
4.2 Price Multiples
PPG's Enterprise Value to EBITDA ratio is in line with the industry average.
PPG's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.28 | ||
| EV/EBITDA | 9.79 |
4.3 Compensation for Growth
The excellent profitability rating of PPG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.25
EPS Next 2Y2.88%
EPS Next 3Y5.06%
5. Dividend
5.1 Amount
PPG has a Yearly Dividend Yield of 2.72%. 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 3.98.
Compared to an average S&P500 Dividend Yield of 2.51, PPG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.72% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.16%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
55.73% 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.
DP55.73%
EPS Next 2Y2.88%
EPS Next 3Y5.06%
99.4
-0.65 (-0.65%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners88.78%
Inst Owner Change0.26%
Ins Owners0.1%
Ins Owner Change0.92%
Market Cap22.56B
Analysts71.88
Price Target136.22 (37.04%)
Short Float %1.74%
Short Ratio1.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.72% |
Yearly Dividend2.67
Dividend Growth(5Y)6.16%
DP55.73%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.59%
Min EPS beat(2)-3.35%
Max EPS beat(2)-1.83%
EPS beat(4)0
Avg EPS beat(4)-1.61%
Min EPS beat(4)-3.35%
Max EPS beat(4)-0.3%
EPS beat(8)4
Avg EPS beat(8)2.78%
EPS beat(12)7
Avg EPS beat(12)4.53%
EPS beat(16)10
Avg EPS beat(16)4.61%
Revenue beat(2)0
Avg Revenue beat(2)-5.7%
Min Revenue beat(2)-8.85%
Max Revenue beat(2)-2.56%
Revenue beat(4)0
Avg Revenue beat(4)-4.68%
Min Revenue beat(4)-8.85%
Max Revenue beat(4)-2.56%
Revenue beat(8)1
Avg Revenue beat(8)-2.55%
Revenue beat(12)3
Avg Revenue beat(12)-1.63%
Revenue beat(16)6
Avg Revenue beat(16)-0.66%
PT rev (1m)0%
PT rev (3m)-9.07%
EPS NQ rev (1m)-1.21%
EPS NQ rev (3m)-17.65%
EPS NY rev (1m)-1.57%
EPS NY rev (3m)-11.7%
Revenue NQ rev (1m)0.11%
Revenue NQ rev (3m)-8.3%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-4.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.27 | ||
| Fwd PE | 12.61 | ||
| P/S | 1.42 | ||
| P/FCF | 32.28 | ||
| P/OCF | 15.89 | ||
| P/B | 3.33 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.79 |
EPS(TTM)8.1
EY8.15%
EPS(NY)7.88
Fwd EY7.93%
FCF(TTM)3.08
FCFY3.1%
OCF(TTM)6.26
OCFY6.29%
SpS69.81
BVpS29.89
TBVpS-3.64
PEG (NY)N/A
PEG (5Y)2.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.74% | ||
| ROE | 16.45% | ||
| ROCE | 15.65% | ||
| ROIC | 11.66% | ||
| ROICexc | 12.87% | ||
| ROICexgc | 30.82% | ||
| OM | 14.24% | ||
| PM (TTM) | 7.04% | ||
| GM | 41.61% | ||
| FCFM | 4.41% |
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-Score6
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 8.32 | ||
| Debt/EBITDA | 1.78 | ||
| Cap/Depr | 146.54% | ||
| Cap/Sales | 4.55% | ||
| Interest Coverage | 9.14 | ||
| Cash Conversion | 51.66% | ||
| Profit Quality | 62.63% | ||
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 3.95 |
F-Score6
WACC8.18%
ROIC/WACC1.43
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)5.61%
EPS 3Y6.16%
EPS 5Y5.46%
EPS Q2Q%5.23%
EPS Next Y-2.67%
EPS Next 2Y2.88%
EPS Next 3Y5.06%
EPS Next 5Y5.19%
Revenue 1Y (TTM)-13.16%
Revenue growth 3Y-1.94%
Revenue growth 5Y0.91%
Sales Q2Q%-14.28%
Revenue Next Year-11.49%
Revenue Next 2Y-4.48%
Revenue Next 3Y-1.81%
Revenue Next 5Y1.42%
EBIT growth 1Y-0.04%
EBIT growth 3Y10.34%
EBIT growth 5Y3.84%
EBIT Next Year14.92%
EBIT Next 3Y8.81%
EBIT Next 5Y7.18%
FCF growth 1Y-62.46%
FCF growth 3Y-16.27%
FCF growth 5Y-15.96%
OCF growth 1Y-41.1%
OCF growth 3Y-3.13%
OCF growth 5Y-7.35%