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 84 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 valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year PPG was profitable.
PPG had a positive operating cash flow in the past year.
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 has a Return On Assets of 6.80%. This is amongst the best in the industry. PPG outperforms 82.93% of its industry peers.
PPG's Return On Equity of 19.08% is amongst the best of the industry. PPG outperforms 89.02% of its industry peers.
PPG has a better Return On Invested Capital (10.38%) than 89.02% 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 6.57%.
The 3 year average ROIC (8.56%) for PPG is below the current ROIC(10.38%), indicating increased profibility in the last year.
| 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 76.83% of its industry peers.
In the last couple of years the Profit Margin of PPG has declined.
PPG has a better Operating Margin (12.83%) than 73.17% of its industry peers.
PPG's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 42.47%, PPG belongs to the top of the industry, outperforming 85.37% of the companies in the same industry.
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 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), PPG is creating some value.
The number of shares outstanding for PPG remains at a similar level compared to 1 year ago.
Compared to 5 years ago, PPG has less shares outstanding
The debt/assets ratio for PPG has been reduced compared to a year ago.
2.2 Solvency
PPG has an Altman-Z score of 3.98. This indicates that PPG is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 3.98, PPG belongs to the best of the industry, outperforming 85.37% of the companies in the same industry.
PPG has a debt to FCF ratio of 5.06. This is a neutral value as PPG would need 5.06 years to pay back of 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 70.73% of its industry peers.
A Debt/Equity ratio of 0.79 indicates that PPG is somewhat dependend on debt financing.
PPG has a Debt to Equity ratio (0.79) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 5.06 | ||
| Altman-Z | 3.98 |
ROIC/WACC1.26
WACC8.23%
2.3 Liquidity
A Current Ratio of 1.58 indicates that PPG should not have too much problems paying its short term obligations.
PPG has a Current ratio of 1.58. This is in the lower half of the industry: PPG underperforms 64.63% 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 41.46% 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.
The Revenue has decreased by -0.28% in the past year.
Measured over the past years, PPG shows a small growth in Revenue. The Revenue has been growing by 3.48% on average per year.
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 6.08% on average over the next years.
PPG is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.08% yearly.
EPS Next Y7.47%
EPS Next 2Y7.89%
EPS Next 3Y8.65%
EPS Next 5Y6.08%
Revenue Next Year-2.23%
Revenue Next 2Y-5.14%
Revenue Next 3Y-2.2%
Revenue Next 5Y-0.08%
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
The Price/Earnings ratio is 15.25, which indicates a correct valuation of PPG.
Based on the Price/Earnings ratio, PPG is valued a bit cheaper than the industry average as 70.73% of the companies are valued more expensively.
PPG is valuated rather cheaply when we compare the Price/Earnings ratio to 28.28, which is the current average of the S&P500 Index.
PPG is valuated correctly with a Price/Forward Earnings ratio of 13.70.
67.07% of the companies in the same industry are more expensive than PPG, based on the Price/Forward Earnings ratio.
PPG is valuated cheaply when we compare the Price/Forward Earnings ratio to 91.29, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.25 | ||
| Fwd PE | 13.7 |
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 a bit cheaper when compared to the industry. PPG is cheaper than 63.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.16 | ||
| EV/EBITDA | 11.68 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of PPG may justify a higher PE ratio.
PEG (NY)2.04
PEG (5Y)2.81
EPS Next 2Y7.89%
EPS Next 3Y8.65%
5. Dividend
5.1 Amount
PPG has a Yearly Dividend Yield of 2.20%. 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 3.21.
Compared to an average S&P500 Dividend Yield of 2.27, PPG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
5.2 History
The dividend of PPG is nicely growing with an annual growth rate of 6.45%!
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)6.45%
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 2Y7.89%
EPS Next 3Y8.65%
PPG INDUSTRIES INC
NYSE:PPG (1/30/2025, 9:49:03 AM)
122.34
-0.04 (-0.03%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners85.14%
Inst Owner Change-0.1%
Ins Owners0.1%
Ins Owner Change-0.14%
Market Cap28.38B
Analysts74.38
Price Target149.81 (22.45%)
Short Float %2.34%
Short Ratio2.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
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)-0.65%
PT rev (3m)-1.84%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.14%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.92%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.77%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)-2.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.25 | ||
| Fwd PE | 13.7 | ||
| P/S | 1.57 | ||
| P/FCF | 22.16 | ||
| P/OCF | 14.39 | ||
| P/B | 3.64 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.68 |
EPS(TTM)8.02
EY6.56%
EPS(NY)8.93
Fwd EY7.3%
FCF(TTM)5.52
FCFY4.51%
OCF(TTM)8.5
OCFY6.95%
SpS77.72
BVpS33.57
TBVpS-2.13
PEG (NY)2.04
PEG (5Y)2.81
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 | 3.98 |
F-Score7
WACC8.23%
ROIC/WACC1.26
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 5Y6.08%
Revenue 1Y (TTM)-0.28%
Revenue growth 3Y9.67%
Revenue growth 5Y3.48%
Sales Q2Q%-1.49%
Revenue Next Year-2.23%
Revenue Next 2Y-5.14%
Revenue Next 3Y-2.2%
Revenue Next 5Y-0.08%
EBIT growth 1Y8.74%
EBIT growth 3Y9.5%
EBIT growth 5Y4.66%
EBIT Next Year24.99%
EBIT Next 3Y11.05%
EBIT Next 5Y6.9%
FCF growth 1Y309.27%
FCF growth 3Y1.02%
FCF growth 5Y12.01%
OCF growth 1Y137.02%
OCF growth 3Y4.55%
OCF growth 5Y10.45%