PPG Industries, Inc.
PPG Industries, Inc. Fundamental Analysis
PPG Industries, Inc. (PPG) shows moderate financial fundamentals with a PE ratio of 14.50, profit margin of 9.93%, and ROE of 33.60%. The company generates $15.8B in annual revenue with weak year-over-year growth of -2.44%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 81.9/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze PPG's fundamental strength across five key dimensions:
Efficiency Score
ExcellentPPG demonstrates superior asset utilization.
Valuation Score
ExcellentPPG trades at attractive valuation levels.
Growth Score
WeakPPG faces weak or negative growth trends.
Financial Health Score
ExcellentPPG maintains a strong and stable balance sheet.
Profitability Score
ModeratePPG maintains healthy but balanced margins.
Key Financial Metrics
Is PPG Expensive or Cheap?
P/E Ratio
PPG trades at 14.50 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, PPG's PEG of 0.25 indicates potential undervaluation.
Price to Book
The market values PPG Industries, Inc. at -6.45 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.21 times EBITDA. This is generally considered low.
How Well Does PPG Make Money?
Net Profit Margin
For every $100 in sales, PPG Industries, Inc. keeps $9.93 as profit after all expenses.
Operating Margin
Core operations generate 12.72 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $33.60 in profit for every $100 of shareholder equity.
ROA
PPG Industries, Inc. generates $19.80 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
PPG Industries, Inc. produces operating cash flow of $1.93B, showing steady but balanced cash generation.
Free Cash Flow
PPG Industries, Inc. produces free cash flow of $1.16B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $5.18 in free cash annually.
FCF Yield
PPG converts 5.12% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
14.50
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.25
vs 25 benchmark
P/B Ratio
Price to book value ratio
-6.45
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.43
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-2.10
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.62
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.34
vs 25 benchmark
ROA
Return on assets percentage
0.20
vs 25 benchmark
ROCE
Return on capital employed
0.66
vs 25 benchmark
How PPG Stacks Against Its Sector Peers
| Metric | PPG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 14.50 | 24.91 | Better (Cheaper) |
| ROE | 33.60% | 840.00% | Weak |
| Net Margin | 9.93% | -105381.00% (disorted) | Weak |
| Debt/Equity | -2.10 | 0.55 | Strong (Low Leverage) |
| Current Ratio | 1.62 | 4.94 | Neutral |
| ROA | 19.80% | -4176.00% (disorted) | Strong |
PPG outperforms its industry in 3 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews PPG Industries, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
6.00%
Industry Style: Cyclical, Commodity, Value
GrowingEPS CAGR
-9.03%
Industry Style: Cyclical, Commodity, Value
DecliningFCF CAGR
-30.83%
Industry Style: Cyclical, Commodity, Value
Declining