PPG Industries Inc.
’s
PPG
shares have popped 21.6% over the past three months. The company has also outperformed its
industry
’s rise of 12.6% to over the same time frame.
PPG Industries, a Zacks Rank #2 (Buy) stock, has a market cap of roughly $33.8 billion and average volume of shares traded in the last three months is around 1,307.5K. The company has an expected long-term earnings per share growth rate of 5.2%.
Let’s delve deeper into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
Better-than-expected earnings performance in the third quarter has contributed to the gain in PPG Industries’ shares. The company’s adjusted earnings per share of $1.93 for the third quarter beat the Zacks Consensus Estimate of $1.92. Net sales of $3,685 million also surpassed the Zacks Consensus Estimate of $3,608.7 million. The company benefited from its cost-management actions, contributions of acquisitions and higher selling prices in the quarter.
Earnings estimate revisions also have the greatest impact on stock prices. Over the past month, the Zacks Consensus Estimate for PPG Industries for the current year has increased 4.6%. The consensus estimate for 2021 has also been revised 4.2% upward over the same time frame.
PPG Industries 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. The company expects to achieve restructuring savings of $30-$35 million in the fourth quarter of 2020.
PPG Industries is also 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. Acquisitions are expected to contribute to the company’s top line this year.
Moreover, the company 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.
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
Agnico Eagle Mines Limited
AEM
,
Barrick Gold Corporation
GOLD
and
Pretium Resources Inc.
PVG
.
Agnico Eagle has a projected earnings growth rate of 103.1% for the current year. The company’s shares have gained around 19% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Barrick Gold has an expected earnings growth rate of 115.7% for the current year. The company’s shares have surged around 52% in the past year. It currently carries a Zacks Rank #1.
Pretium Resources has an expected earnings growth rate of 25.5% for the current year. The company’s shares have gained around 26% in the past year. It currently carries a Zacks Rank #2.
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