Yahoo Finance Why You Should Add PPG Industries (PPG) to Your Portfolio
PPG Industries Inc. PPG is well-placed to benefit from cost savings from restructuring actions. The company is gaining from acquisitions and pricing initiatives. The company also remains committed to boosting returns to shareholders.
Shares of PPG Industries are up 12.3% over the past six months compared with 12.8% rise of its industry.
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We are positive about 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.
Let’s see what makes this Zacks Rank #2 (Buy) stock an attractive investment option at the moment.
Healthy Growth Prospects
The Zacks Consensus Estimate for earnings for the current year for PPG Industries is pegged at $6.49, implying year-over-year growth of 7.3%. The Zacks Consensus Estimate for earnings for 2024 is currently pegged at $6.97, suggesting year-over-year growth of 7.4%.
Positive Earnings Surprise History
PPG Industries beat Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 8% on average.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholders’ funds. ROE for the trailing 12 months for PPG Industries is 22.5%, above the industry’s level of 15.8%.
Cost and Pricing Actions to Drive Margins
The company is implementing a cost-cutting and restructuring strategy, as well as optimizing its working capital requirements. The cost savings generated by these restructuring initiatives will be a tailwind for the company. PPG Industries has undertaken extensive restructuring efforts to reduce its cost structure, primarily focusing on regions and end markets with weak business conditions.
PPG Industries is on track to raise selling prices across its business segments to offset the impact of rising raw material costs. The company intends to completely recover the cost inflation experienced since 2021, with continued price hikes beginning in 2023. This is likely to strengthen its margins in 2023.
Acquisitions to Aid Top-Line Growth
The company is also undertaking measures to grow business inorganically through value-creating acquisitions. Contributions from the acquisitions are expected to get reflected in its performance in 2023. Buyouts, including Tikkurila, Worwag and Cetelon, are likely to contribute to its top line this year.
PPG Industries, Inc. Price and Consensus
PPG Industries, Inc. price-consensus-chart | PPG Industries, Inc. Quote
Other Stocks to Consider
Other top-ranked stocks worth considering in the Basic Materials space include Steel Dynamics Inc. STLD, Nucor Corporation NUE and Linde plc LIN.
STLD carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for STLD’s current-year earnings has been revised 8.5% upward in the past 60 days. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 11.3%. STLD has rallied roughly 46.5% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
NUE carries a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised 14.7% upward in the past 60 days. Earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 7.7%. NUE has gained roughly 31.1% in a year.
Linde carries a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has been revised 3.7% upward in the past 60 days. Earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 5.9%. LIN has gained roughly 26.8% in a year.
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Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
Nucor Corporation (NUE) : Free Stock Analysis Report
PPG Industries, Inc. (PPG) : Free Stock Analysis Report
Linde PLC (LIN) : Free Stock Analysis Report
