PPG INDUSTRIES INC (PPG) Stock Fundamental Analysis
NYSE:PPG - New York Stock Exchange, Inc. - US6935061076 - Common Stock - Currency: USD
Overall PPG gets a fundamental rating of 5 out of 10. We evaluated PPG against 85 industry peers in the Chemicals industry. PPG has an excellent profitability rating, but 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
In the past year PPG was profitable.
In the past year PPG had a positive cash flow from operations.
Each year in the past 5 years PPG has been profitable.
In the past 5 years PPG always reported a positive cash flow from operatings.
1.2 Ratios
PPG's Return On Assets of 5.15% is fine compared to the rest of the industry. PPG outperforms 76.47% of its industry peers.
PPG has a Return On Equity of 15.72%. This is amongst the best in the industry. PPG outperforms 85.88% of its industry peers.
The Return On Invested Capital of PPG (10.65%) is better than 87.06% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PPG is above the industry average of 6.84%.
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
PPG's Profit Margin of 7.16% is fine compared to the rest of the industry. PPG outperforms 77.65% of its industry peers.
In the last couple of years the Profit Margin of PPG has declined.
PPG has a better Operating Margin (14.38%) than 75.29% of its industry peers.
PPG's Operating Margin has improved in the last couple of years.
The Gross Margin of PPG (41.19%) is better than 85.88% 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.
PPG has less 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 a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.78 indicates that PPG is not in any danger for bankruptcy at the moment.
PPG has a better Altman-Z score (3.78) than 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 64.71% 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 comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.81 | ||
| Debt/FCF | 9.22 | ||
| Altman-Z | 3.78 |
ROIC/WACC1.26
WACC8.46%
2.3 Liquidity
A Current Ratio of 1.35 indicates that PPG should not have too much problems paying its short term obligations.
PPG has a Current ratio of 1.35. This is in the lower half of the industry: PPG underperforms 75.29% 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.
PPG's Quick ratio of 0.99 is on the low side compared to the rest of the industry. PPG is outperformed by 61.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
PPG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.24%.
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.
Looking at the last year, PPG shows a very negative growth in Revenue. The Revenue has decreased by -16.28% in the last year.
PPG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.91% yearly.
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 6.45% yearly.
PPG is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.32% yearly.
EPS Next Y-1.63%
EPS Next 2Y3.3%
EPS Next 3Y5.31%
EPS Next 5Y6.45%
Revenue Next Year-11.38%
Revenue Next 2Y-4.44%
Revenue Next 3Y-1.98%
Revenue Next 5Y-0.32%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 14.86, 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 71.76% of the companies in the same industry.
When comparing the Price/Earnings ratio of PPG to the average of the S&P500 Index (27.45), we can say PPG is valued slightly cheaper.
PPG is valuated correctly with a Price/Forward Earnings ratio of 13.68.
Based on the Price/Forward Earnings ratio, PPG is valued a bit cheaper than the industry average as 62.35% of the companies are valued more expensively.
PPG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.86 | ||
| Fwd PE | 13.68 |
4.2 Price Multiples
PPG's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as PPG.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.07 | ||
| EV/EBITDA | 12.08 |
4.3 Compensation for Growth
The excellent profitability rating of PPG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.72
EPS Next 2Y3.3%
EPS Next 3Y5.31%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.30%, PPG has a reasonable but not impressive dividend return.
PPG's Dividend Yield is a higher than the industry average which is at 3.58.
Compared to an average S&P500 Dividend Yield of 2.38, PPG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
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
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 around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP57.21%
EPS Next 2Y3.3%
EPS Next 3Y5.31%
118.28
-0.31 (-0.26%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners87.14%
Inst Owner Change-3.64%
Ins Owners0.12%
Ins Owner Change1.17%
Market Cap26.85B
Analysts71.61
Price Target130.98 (10.74%)
Short Float %1.66%
Short Ratio2.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
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)0.65%
PT rev (3m)-3.85%
EPS NQ rev (1m)-0.26%
EPS NQ rev (3m)-3.01%
EPS NY rev (1m)0.09%
EPS NY rev (3m)-0.34%
Revenue NQ rev (1m)-0.14%
Revenue NQ rev (3m)0.21%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.86 | ||
| Fwd PE | 13.68 | ||
| P/S | 1.76 | ||
| P/FCF | 34.07 | ||
| P/OCF | 18.36 | ||
| P/B | 3.88 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.08 |
EPS(TTM)7.96
EY6.73%
EPS(NY)8.64
Fwd EY7.31%
FCF(TTM)3.47
FCFY2.93%
OCF(TTM)6.44
OCFY5.45%
SpS67.04
BVpS30.52
TBVpS-3.66
PEG (NY)N/A
PEG (5Y)2.72
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 | 3.78 |
F-Score5
WACC8.46%
ROIC/WACC1.26
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-1.63%
EPS Next 2Y3.3%
EPS Next 3Y5.31%
EPS Next 5Y6.45%
Revenue 1Y (TTM)-16.28%
Revenue growth 3Y-1.94%
Revenue growth 5Y0.91%
Sales Q2Q%-14.54%
Revenue Next Year-11.38%
Revenue Next 2Y-4.44%
Revenue Next 3Y-1.98%
Revenue Next 5Y-0.32%
EBIT growth 1Y-2.93%
EBIT growth 3Y10.34%
EBIT growth 5Y3.84%
EBIT Next Year12.07%
EBIT Next 3Y7.72%
EBIT Next 5Y7.23%
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%