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PPG Industries (PPG) Stock Up 30% in 6 Months: Here's Why
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PPG Industries Inc.’s (PPG - Free Report) shares have rallied 29.6% over the past six months. The company has also outperformed its industry’s rise of 20% to over the same time frame.
PPG Industries, a Zacks Rank #2 (Buy) stock, has a market cap of roughly $34.7 billion and average volume of shares traded in the last three months is around 1,303.9K. The company has an expected long-term earnings per share growth rate of 5.2%.
Let’s take a look into the factors behind the stock’s price appreciation.
What’s Aiding PPG?
PPG Industries is benefiting from its restructuring initiatives, cost-management actions and efforts to grow its business inorganically. These actions helped the company to deliver forecast-topping results in the third quarter.
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.
Moreover, PPG Industries is taking steps to grow business 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.
The company also 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.
Earnings estimates for PPG Industries have also been going up over the past two months. The Zacks Consensus Estimate for the current year has increased 13.4%. The consensus estimate for 2021 has also been revised 8% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Other top-ranked stocks worth considering in the basic materials space include Bunge Limited (BG - Free Report) , BHP Group (BHP - Free Report) and Silvercorp Metals Inc. (SVM - Free Report) .
Bunge has an expected earnings growth rate of 43% for the current year. The company’s shares have gained around 15% in the past year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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 #2.
Silvercorp has an expected earnings growth rate of 40% for the current fiscal. The company’s shares have gained around 14% in the past year. It currently carries a Zacks Rank #2.
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PPG Industries (PPG) Stock Up 30% in 6 Months: Here's Why
PPG Industries Inc.’s (PPG - Free Report) shares have rallied 29.6% over the past six months. The company has also outperformed its industry’s rise of 20% to over the same time frame.
PPG Industries, a Zacks Rank #2 (Buy) stock, has a market cap of roughly $34.7 billion and average volume of shares traded in the last three months is around 1,303.9K. The company has an expected long-term earnings per share growth rate of 5.2%.
Let’s take a look into the factors behind the stock’s price appreciation.
What’s Aiding PPG?
PPG Industries is benefiting from its restructuring initiatives, cost-management actions and efforts to grow its business inorganically. These actions helped the company to deliver forecast-topping results in the third quarter.
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.
Moreover, PPG Industries is taking steps to grow business 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.
The company also 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.
Earnings estimates for PPG Industries have also been going up over the past two months. The Zacks Consensus Estimate for the current year has increased 13.4%. The consensus estimate for 2021 has also been revised 8% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
PPG Industries, Inc. Price and Consensus
PPG Industries, Inc. price-consensus-chart | PPG Industries, Inc. Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Bunge Limited (BG - Free Report) , BHP Group (BHP - Free Report) and Silvercorp Metals Inc. (SVM - Free Report) .
Bunge has an expected earnings growth rate of 43% for the current year. The company’s shares have gained around 15% in the past year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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 #2.
Silvercorp has an expected earnings growth rate of 40% for the current fiscal. The company’s shares have gained around 14% in the past year. It currently carries a Zacks Rank #2.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>