Head-To-Head Comparison: Axalta Coating Systems (AXTA) and PPG Industries (PPG)

Axalta Coating Systems (NYSE: AXTA) and PPG Industries (NYSE:PPG) are both mid-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Insider & Institutional Ownership

99.3% of Axalta Coating Systems shares are owned by institutional investors. Comparatively, 75.1% of PPG Industries shares are owned by institutional investors. 2.3% of Axalta Coating Systems shares are owned by company insiders. Comparatively, 0.7% of PPG Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

PPG Industries pays an annual dividend of $1.80 per share and has a dividend yield of 1.6%. Axalta Coating Systems does not pay a dividend. PPG Industries pays out 26.1% of its earnings in the form of a dividend. Axalta Coating Systems has increased its dividend for 44 consecutive years.

Valuation and Earnings

This table compares Axalta Coating Systems and PPG Industries’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Axalta Coating Systems $4.07 billion 1.93 $41.80 million $0.24 134.63
PPG Industries $14.75 billion 2.00 $877.00 million $6.89 16.85

PPG Industries has higher revenue and earnings than Axalta Coating Systems. PPG Industries is trading at a lower price-to-earnings ratio than Axalta Coating Systems, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Axalta Coating Systems and PPG Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Axalta Coating Systems 1 6 8 0 2.47
PPG Industries 0 8 7 0 2.47

Axalta Coating Systems presently has a consensus target price of $33.50, suggesting a potential upside of 3.68%. PPG Industries has a consensus target price of $119.40, suggesting a potential upside of 2.83%. Given Axalta Coating Systems’ higher probable upside, research analysts plainly believe Axalta Coating Systems is more favorable than PPG Industries.

Profitability

This table compares Axalta Coating Systems and PPG Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Axalta Coating Systems 1.46% 19.91% 4.30%
PPG Industries 12.21% 27.85% 9.19%

Volatility and Risk

Axalta Coating Systems has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, PPG Industries has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500.

Summary

PPG Industries beats Axalta Coating Systems on 9 of the 16 factors compared between the two stocks.

Axalta Coating Systems Company Profile

Axalta Coating Systems Ltd. is a holding company. The Company is a manufacturer, marketer and distributor of coatings systems primarily serving the transportation industry. The Company’s segments include Performance Coatings and Transportation Coatings. Through its Performance Coatings segment, the Company provides liquid and powder coatings solutions to a fragmented and local customer base. Through its Transportation Coatings segment, the Company provides coating technologies to original equipment manufacturers (OEMs) of light and commercial vehicles. The Performance Coatings segment serves various end markets, including refinish and industrial. The Company develops, markets and supplies a portfolio of coatings systems and color matching technologies. The Company also develops and supplies an array of coatings systems for a range of commercial applications, including heavy-duty truck (HDT), bus, rail and agricultural construction equipment (ACE).

PPG Industries Company Profile

PPG Industries, Inc. manufactures and distributes a range of coatings and specialty materials. The Company has two segments: Performance Coatings and Industrial Coatings. 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 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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