How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in PPG Industries (PPG) ten years ago? It may not have been easy to hold on to PPG for all that time, but if you did, how much would your investment be worth today?
PPG Industries' Business In-Depth
With that in mind, let's take a look at PPG Industries' main business drivers.
PPG Industries Inc (NYSE:PPG)., based in Pennsylvania, is a global supplier of paints, coatings, chemicals, specialty materials, glass, and fiber glass. The company has manufacturing facilities and equity affiliates in about 70 countries.
PPG Industries currently has two reportable segments: Performance Coatings and Industrial Coatings.
Performance Coatings: The division comprises refinish, aerospace, architectural coatings – Americas and Asia Pacific, architectural coatings – EMEA (Europe, Middle-East, and Africa), and protective and marine coatings operating segments. The segment primarily supplies a variety of protective and decorative coatings, sealants and finishes along with paint strippers, stains and related chemicals, as well as transparencies and transparent armor.
Industrial Coatings: The segment consists of the automotive original equipment manufacturer (OEM) coatings, industrial coatings, packaging coatings, and the specialty coatings and materials operating segments. The segment primarily supplies a variety of protective and decorative coatings and finishes along with adhesives, sealants, metal pretreatment products, optical monomers and coatings, precipitated silicas and other specialty materials.
PPG Industries recorded revenues of around $13.8 billion in 2020 with Performance Coatings and Industrial Coatings accounting for 61% and 39%, respectively.
PPG Industries is expanding inorganically through acquisitions. The company, in November 2014, completed its purchase of leading Mexican paint company – Consorcio Comex S.A. de C.V. – for $2.3 billion. Comex makes architectural and industrial coatings and related products in Mexico.
In January 2018, the company acquired Netherlands-based leading architectural paint and coatings wholesaler, ProCoatings. The buyout strengthens its architectural coatings Americas and Asia Pacific business within the Performance Coatings division. In January 2017, the company acquired certain assets of automotive refinish coatings company — Futian Xinshi — in the Guangdong province, China. The move enables the company to expand footprint in China.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For PPG Industries, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in April 2011 would be worth $3,658.81, or a 265.88% gain, as of April 30, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 208.85% and gold's return of 9.09% over the same time frame.
Analysts are anticipating more upside for PPG.
PPG Industries’ adjusted earnings and sales for the first quarter beat the respective Zacks Consensus Estimate. The company has a diversified product offering and geographical presence. PPG Industries is executing an aggressive cost cutting and restructuring strategy. Cost savings from these restructuring efforts will act as a positive catalyst for the company and will likely support its margins in 2021. The company is also taking steps to grow its business inorganically. Its recent acquisitions will provide it with a broader range of technology and products. Acquisitions including Industria Chimica Reggiana and Ennis-Flint are expected to contribute to its sales this year. The company also remains committed to returning cash to shareholders through dividends and share repurchases. It has also outperformed the industry over a year.
Shares have gained 13.97% over the past four weeks and there have been 7 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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