Head-To-Head Contrast: PPG Industries (PPG) & Sherwin-Williams Company (The) (SHW)

Sherwin-Williams Company (The) (NYSE: SHW) and PPG Industries (NYSE:PPG) are both large-cap construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitabiliy, dividends, analyst recommendations, earnings, institutional ownership and risk.

Valuation and Earnings

This table compares Sherwin-Williams Company (The) and PPG Industries’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sherwin-Williams Company (The) $12.04 billion 2.71 $2.04 billion $12.75 27.61
PPG Industries $14.78 billion 1.92 $2.55 billion $3.27 33.95

PPG Industries has higher revenue and earnings than Sherwin-Williams Company (The). Sherwin-Williams Company (The) is trading at a lower price-to-earnings ratio than PPG Industries, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

73.2% of Sherwin-Williams Company (The) shares are held by institutional investors. Comparatively, 71.8% of PPG Industries shares are held by institutional investors. 1.7% of Sherwin-Williams Company (The) shares are held by insiders. Comparatively, 0.7% of PPG Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Sherwin-Williams Company (The) pays an annual dividend of $3.40 per share and has a dividend yield of 1.0%. PPG Industries pays an annual dividend of $1.60 per share and has a dividend yield of 1.4%. Sherwin-Williams Company (The) pays out 26.7% of its earnings in the form of a dividend. PPG Industries pays out 48.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sherwin-Williams Company (The) has raised its dividend for 44 consecutive years and PPG Industries has raised its dividend for 38 consecutive years.

Analyst Recommendations

This is a summary of current ratings and price targets for Sherwin-Williams Company (The) and PPG Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sherwin-Williams Company (The) 1 5 12 0 2.61
PPG Industries 0 7 8 0 2.53

Sherwin-Williams Company (The) presently has a consensus target price of $354.71, indicating a potential upside of 0.76%. PPG Industries has a consensus target price of $114.92, indicating a potential upside of 3.53%. Given PPG Industries’ higher probable upside, analysts plainly believe PPG Industries is more favorable than Sherwin-Williams Company (The).

Risk and Volatility

Sherwin-Williams Company (The) has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, PPG Industries has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500.

Profitability

This table compares Sherwin-Williams Company (The) and PPG Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sherwin-Williams Company (The) 10.02% 71.96% 17.88%
PPG Industries 5.79% 30.40% 9.61%

Summary

Sherwin-Williams Company (The) beats PPG Industries on 11 of the 17 factors compared between the two stocks.

About Sherwin-Williams Company (The)

The Sherwin-Williams Company (Sherwin-Williams) is engaged in the development, manufacture, distribution and sale of paint, coatings and related products. The Company’s segments are Paint Stores Group, Consumer Group, Global Finishes Group, Latin America Coatings Group and Administrative. The Paint Stores Group markets and sells Sherwin-Williams branded architectural paint and coatings, protective and marine products, original equipment manufacturer (OEM) product finishes and related items. The Consumer Group segment manufactures and distributes a range of paint, coatings and related products. The Global Finishes Group develops, licenses and manufactures a range of protective and marine products, automotive finishes and refinish products, OEM product finishes and related products. The Latin America Coatings Group develops, licenses, manufactures and distributes a range of architectural paint and coatings, protective and marine products, OEM product finishes and related products.

About PPG Industries

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.

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