PPG Industries Inc.
’s
PPG
stock looks promising at the moment. The company’s shares have popped 20% over the past three months. It is gaining from its restructuring initiatives, cost-management actions and strategic acquisitions.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.
PPG Industries currently has a Zacks Rank #2 (Buy) and a
VGM Score
of B. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities for investors.
Let’s delve deeper into the factors that make this paints giant an attractive choice for investors right now.
Price Performance
Shares of PPG Industries have rallied 39% over the past six months against the 30% rise of its
industry
. It has also outperformed the S&P 500’s roughly 19.6% rise over the same period.
Estimates Going Up
Over the past two months, the Zacks Consensus Estimate for PPG Industries for the current year has increased around 4.8%. The consensus estimate for 2021 has also been revised 5.7% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Cash Deployment
PPG Industries remains committed to boost returns to shareholders leveraging strong cash flows. In July 2020, it raised its quarterly dividend by 6% to 54 cents per share. Notably, PPG Industries has raised its annual dividend payout for 49th straight year. It also generated more than $800 million of cash from operations during the third quarter.
Cost Actions to Drive Margins
The company is actively managing costs amid a challenging environment due to the coronavirus pandemic. In the third quarter, it delivered more than $35 million of incremental structural savings from business restructuring programs and around $90 million of cost savings from various interim initiatives. PPG Industries expects to achieve restructuring savings of $30-$35 million in the fourth quarter.
Acquisitions to Boost Top Line
PPG Industries is taking steps to grow business inorganically through strategic acquisitions. The acquisition of specialty materials maker, Dexmet Corporation, has allowed the company to add value to its customers by enhancing product offerings as well as expanding R&D capabilities. The purchase of Industria Chimica Reggiana also complements the company’s current product offerings for the automotive refinish and light industrial coatings industries. Earlier this year, the company also closed the acquisition of Alpha Coating Technologies.
The company also recently agreed to acquire Ennis-Flint, a global manufacturer of coatings. This acquisition will help PPG Industries expand its product portfolio and broaden opportunities in rapidly developing and high-growth mobility technology solutions. Acquisitions are expected to contribute to the company’s top line this year.
PPG Industries, Inc. Price and Consensus
PPG Industries, Inc. price-consensus-chart
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PPG Industries, Inc. Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include
Bunge Limited
BG
,
Impala Platinum Holdings Limited
IMPUY
and
BHP Group
BHP
.
Bunge has an expected earnings growth rate of 43.5% for the current year. The company’s shares have gained around 14% in the past year. It currently carries a Zacks Rank #1. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Impala Platinum has an expected earnings growth rate of 131.7% for the current fiscal. The company’s shares have rallied around 37% in the past year. It currently carries a Zacks Rank #1.
BHP Group has a projected earnings growth rate of 32.4% for the current fiscal year. The company’s shares have gained around 21% in a year. It currently carries a Zacks Rank #1.
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