Dividend Kings In Focus: PPG Industries

PPG has maintained its long history of dividend increases thanks to a superior position in its industry. Its competitive advantages have fueled the company’s long-term growth.

As we see the potential for continued growth in PPG’s core markets, the company should keep increasing its dividend each year.

However, we also view the stock as overvalued right now.

This article will discuss PPG’s business model, growth potential, and valuation.

Business Overview

PPG Industries is the world’s largest paints and coatings company. Its only competitors of similar size are Sherwin–Williams and Dutch paint company Akzo Nobel.

PPG Industries was founded in 1883 as a manufacturer and distributor of glass (its name stands for Pittsburgh Plate Glass) and today has approximately 3,500 technical employees located in more than 70 countries at 100 locations.

The company generates annual revenues of about $17 billion.

PPG Industries announced third-quarter results on 10/20/2021. Revenue grew 18.8% to $4.37 billion, beating expectations by $120 million.

Supply chain constraints kept the company from fulfilling many of its orders, putting a cap on revenue growth. Still, organic sales grew 6% for the quarter.

You can see a breakdown of the company’s quarterly sales performance in the image below:

Source: Investor Presentation

Adjusted net income of $406 million, or $1.69 per share, compared to adjusted net income of $481 million, or $1.93 per share, in the prior year. Adjusted earnings–per–share topped consensus estimates by $0.10.

Inflation was a headwind, with raw material costs spiking 25% year–over–year. But PPG Industries was able to raise prices 6% company-wide to help offset this.

Performance Coatings revenue was up by 23% to $2.76 billion. Growth was due mostly to higher selling prices and acquisitions, which easily offset a 1% decline in volumes.

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Disclaimer: Sure Dividend is published as an information service. It includes opinions as to buying, selling and holding various stocks and other securities. However, the publishers of Sure ...

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