- PPG Industries Inc. is a Dividend King that can increase its dividend payout for the next 50 years, a major highlight for risk-averse income investors.
- PPG Industries has been able to sustain a high level of growth despite economic headwinds.
- Learn how to purchase PPG Industries for your portfolio.
Looking for information on PPG Industries Inc. and its dividend payment, including the answers to "What is PPG?" and "What is PPG paint?" You’ve come to the right place. By the time you reach the end of this article, you will have a deep understanding of PPG stock. PPG Industries Inc. is a Dividend King that has the ability to increase its payout for the next 50 years — big news for risk-averse income investors.
It's very possible that you currently use dozens of PPG products, possibly even as you read this article. The company makes paints and coatings that range from acrylics for the home hobbyist to industrial-grade paints, coatings and sealants for machinery, electronics and glass.
PPG Industries has been able to sustain a high level of growth despite economic headwinds that threaten global activity. What’s more, the company has been able to offset the impacts of inflation and maintain a level of earnings growth as well. What this all means for investors is the dividend payment is safe and the outlook for distribution growth is intact. Let's dig into the pros and cons of investing in PPG stock, possibly as part of a how to build a large dividend portfolio.
What is PPG Industries?
PPG Industries got its start in 1883 as the Pittsburgh Plate Glass Company. The company quickly became the first commercially viable producer of plate glass and quickly expanded. By 1900, there were 10 plants in operation and expansion into other materials had already begun. At the time, Pittsburgh Plate Glass Company was the nation’s second largest producer of paint and sparked the natural gas revolution.
The company expanded into auto coatings in 1928 and then went international in the 1980s with the acquisition of operations in Spain. Since then, a series of acquisitions has resulted in what is now the world’s largest producer of paint and coatings. The company has 150 manufacturing plants in over 70 countries, including PPG Industrial Coatings Inc. and serves virtually every industry and sector.
PPG Industries' global headquarters is still located in Pittsburgh, Pennsylvania. The historic One PPG Place, a monumental structure completely enclosed by plate glass, employs more than 50,000 individuals and had net sales of $16.8 billion in 2021. The company is ranked 218th on the Fortune 500 list.
Is PPG a Good Stock to Buy?
PPG Industries Inc. has been able to maintain revenue and earnings growth in the post-pandemic world but the growth is slowing. The company’s Q2 2022 earnings report came with guidance that was below the analyst's consensus estimates but still came with a forecast for growth. Volume sales are expected to be flat in the final quarter of 2022 but offset by pricing increases. In this light, revenue growth should come in the high single digits to low double digits and earnings growth should be present as well.
Longer term, the company faces headwinds that could cap growth in 2023 but fundamentals are in place to support growth beyond that. The rise of inflation and the Federal Open Market Committee’s interest rate stance could cause a global recession in 2023 — a big risk for the company. The salient point for investors to remember is that this company has been has increased its dividend for the last 49 consecutive years and it still has a very strong balance sheet. This means the company has been able to withstand numerous recessions and economic upheavals and come back stronger.
How Safe is PPG Stock?
PPG Industries is one of the safer dividend stocks with high yields available to investors today. The company’s long track record of dividend payments and distribution increases not only provides capital returns for investors but an annually increasing yield on investment that can help to offset the impact of inflation.
In addition, stocks like PPG Industries that have a track record for dividend payments and distribution increases tend to attract more buy-and-hold investors. This means there is above-average institutional interest and higher-than-average holdings among income funds and individual investors. In the case of PPG Industries, this means an above-80% institutional interest and public holdings that make up almost all of the remaining portion.
PPG Industries also has a strong balance sheet.
PPG Stock Market Position and Price Prediction
PPG Industries' stock price pulled back from its post-pandemic highs but it looks like a bottom is in. The price action has bounced several times from the $110 level which is coincident with a key price zone from before and during the pandemic meltdown. If the market is able to follow through on the move in progress, the stock price should go up to the $135 level before encountering major resistance. If the market can get above this level a reversal in action could follow and it might take the stock further. If not, shares of PPG Industries could trend near the recent lows for the remainder of 2022. A fall below the $110 level is not expected but it could happen. If so, the next target for support would be in the $90 to $100 range.
What Analysts Are Saying About PPG Stock
Analysts see value in PPG Industries despite the company’s reduction in guidance. The reduction sparked a massive round of analyst activity that has the consensus price target moving lower and the sentiment firming. The 22 analysts with commentaries less than one year old (most were updated in October 2022) have the stock pegged at a "hold/moderate buy," which is up from the "hold" rating issued for the previous quarter. The consensus price target of $137 is down, however, in the 12, three and one-month comparisons but still offers about 20% of upside when shares trade near the $110 support level.
How to Invest in PPG Stock
Check out a brief description of how investors interested in PPG Industries can invest in PPG stock.
Step 1: Evaluate whether PPG stock is right for you.
The first step to investing in PPG Industries is to decide if the stock is right for you. That is a decision that can only be made by individual investors and should include the stock's impact on portfolio diversification, total return and risk profile. If the stock is right, there are two ways to go about buying it: through direct investment or purchasing through a broker.
Step 2: Consider direct investment and dividend reinvestment.
Direct investment in PPG Industries means contacting the company’s registered agent and buying shares directly from the company. In this case, investors may set up monthly purchases and are also eligible for the dividend reinvestment program. The dividend reinvestment program pays dividends in the form of shares, which can help compound return on investment.
Step 3: Buy the stock through a broker.
If you already have a brokerage account or don’t care about the dividend reinvestment program, you can also buy the stock through a brokerage account. In this case, you are a beneficial shareholder and eligible to receive dividends but the shares are registered in the brokerage's name.
PPG Industries Might Work to Your Advantage
PPG Industries stock is not without risks but the risks are outweighed by the rewards. The company is the leader in its field, on track for long-term global growth. It is a Dividend King, which makes it one of the best dividend stocks of all time. In this light, investors may experience near-term declines in share prices but they will be offset by dividends, dividend growth and capital appreciation over the long term.
Learn more: Dividend Kings vs. Aristocrats
Companies Mentioned in This Article:
|Company||Current Price||Price Change||Dividend Yield||P/E Ratio||Consensus Rating||Consensus Price Target|
|PPG Industries (PPG)||$128.61||-2.6%||2.02%||23.09||Hold||$156.47|
About Thomas Hughes
Thomas got his start with the markets while working as a Chef. In 2005 a chance invitation to attend the seminar “How To Buy And Sell Your Own Stocks” altered his worldview. Soon trading and stocks consumed his every waking moment to the point of excluding all else. Thomas now enjoys a much different lifestyle engaged in his true passion, uncovering great investments.