Analyzing PPG Industries (NYSE:PPG) and Axalta Coating Systems (AXTA)

PPG Industries (NYSE: PPG) and Axalta Coating Systems (NASDAQ:AXTA) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Institutional and Insider Ownership

71.8% of PPG Industries shares are held by institutional investors. 0.7% of PPG Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

PPG Industries pays an annual dividend of $1.80 per share and has a dividend yield of 1.8%. Axalta Coating Systems does not pay a dividend. PPG Industries pays out 46.9% of its earnings in the form of a dividend. PPG Industries has increased its dividend for 44 consecutive years.

Profitability

This table compares PPG Industries and Axalta Coating Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PPG Industries 6.79% 29.47% 9.49%
Axalta Coating Systems 6.50% 21.46% 4.47%

Valuation & Earnings

This table compares PPG Industries and Axalta Coating Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PPG Industries $14.85 billion 1.74 $2.56 billion $3.84 26.23
Axalta Coating Systems $4.17 billion 1.67 $846.10 million N/A N/A

PPG Industries has higher revenue and earnings than Axalta Coating Systems.

Analyst Recommendations

This is a breakdown of current ratings and price targets for PPG Industries and Axalta Coating Systems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PPG Industries 0 9 6 0 2.40
Axalta Coating Systems 1 7 7 0 2.40

PPG Industries currently has a consensus price target of $114.50, indicating a potential upside of 13.67%. Axalta Coating Systems has a consensus price target of $33.07, indicating a potential upside of 15.11%. Given Axalta Coating Systems’ higher possible upside, analysts plainly believe Axalta Coating Systems is more favorable than PPG Industries.

Summary

PPG Industries beats Axalta Coating Systems on 10 of the 14 factors compared between the two stocks.

PPG Industries Company Profile

PPG Industries, Inc. manufactures and distributes a range of coatings and specialty materials. The Company has three segments: Performance Coatings, Industrial Coatings and Glass. The Performance Coatings segment includes the refinish, aerospace, protective and marine, architectural businesses. The Industrial Coatings segment includes the automotive original equipment manufacturer (OEM), industrial coatings, packaging coatings, coatings services and specialty coatings and materials businesses. The Glass segment includes the North American fiber glass business. The Company’s geographical segments include the United States, Canada, Western Europe, Latin America, Central and Eastern Europe, the Middle East, Africa and Asia Pacific. The Company’s brands include PPG, GLIDDEN, COMEX, OLYMPIC, DULUX, SIKKENS, PPG PITTSBURGH PAINTS, MULCO, FLOOD, LIQUID NAILS, SICO, CIL, RENNER, TAUBMANS, WHITE KNIGHT, BRISTOL, HOMAX, DEKORAL, TRILAK, GORI, and BONDEX, among others.

Axalta Coating Systems Company Profile

Axalta Coating Systems Ltd. is a holding company. The Company is a manufacturer, marketer and distributor of coatings systems primarily serving the transportation industry. The Company’s segments include Performance Coatings and Transportation Coatings. Through its Performance Coatings segment, the Company provides liquid and powder coatings solutions to a fragmented and local customer base. Through its Transportation Coatings segment, the Company provides coating technologies to original equipment manufacturers (OEMs) of light and commercial vehicles. The Performance Coatings segment serves various end markets, including refinish and industrial. The Company develops, markets and supplies a portfolio of coatings systems and color matching technologies. The Company also develops and supplies an array of coatings systems for a range of commercial applications, including heavy-duty truck (HDT), bus, rail and agricultural construction equipment (ACE).

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