Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+ . The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 51.50% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PPG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- PPG INDUSTRIES INC has improved earnings per share by 10.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PPG INDUSTRIES INC increased its bottom line by earning $6.87 versus $4.63 in the prior year. This year, the market expects an improvement in earnings ($7.93 versus $6.87).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Chemicals industry average. The net income increased by 6.5% when compared to the same quarter one year prior, going from $340.00 million to $362.00 million.
- 40.50% is the gross profit margin for PPG INDUSTRIES INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.20% trails the industry average.
- Net operating cash flow has slightly increased to $436.00 million or 6.86% when compared to the same quarter last year. Despite an increase in cash flow, PPG INDUSTRIES INC's cash flow growth rate is still lower than the industry average growth rate of 18.09%.
PPG Industries, Inc. manufactures and supplies protective and decorative coatings. The company has a P/E ratio of 20.4, equal to the average chemicals industry P/E ratio and above the S&P 500 P/E ratio of 17.7. PPG has a market cap of $17.99 billion and is part of the basic materials sector and chemicals industry. Shares are up 42.5% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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