RPM International (NYSE: RPM) and PPG Industries (NYSE:PPG) are both mid-cap construction companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitabiliy and earnings.

Dividends

RPM International pays an annual dividend of $1.20 per share and has a dividend yield of 2.4%. PPG Industries pays an annual dividend of $1.60 per share and has a dividend yield of 1.5%. RPM International pays out 79.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PPG Industries pays out 41.7% of its earnings in the form of a dividend. RPM International has raised its dividend for 42 consecutive years and PPG Industries has raised its dividend for 44 consecutive years.

Insider & Institutional Ownership

72.6% of RPM International shares are owned by institutional investors. Comparatively, 71.7% of PPG Industries shares are owned by institutional investors. 2.2% of RPM International shares are owned by insiders. Comparatively, 0.7% of PPG Industries shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares RPM International and PPG Industries’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RPM International $4.89 billion 1.39 $665.01 million $1.51 33.73
PPG Industries $14.85 billion 1.82 $2.56 billion $3.84 27.49

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

Profitability

This table compares RPM International and PPG Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RPM International 4.22% 26.36% 7.55%
PPG Industries 6.79% 30.37% 11.17%

Risk & Volatility

RPM International has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500. Comparatively, PPG Industries has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for RPM International and PPG Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RPM International 0 1 4 0 2.80
PPG Industries 0 9 7 0 2.44

RPM International currently has a consensus target price of $57.50, suggesting a potential upside of 12.90%. PPG Industries has a consensus target price of $115.00, suggesting a potential upside of 8.95%. Given RPM International’s stronger consensus rating and higher possible upside, equities analysts plainly believe RPM International is more favorable than PPG Industries.

Summary

PPG Industries beats RPM International on 11 of the 17 factors compared between the two stocks.

RPM International Company Profile

RPM International Inc., through its subsidiaries, manufactures, markets and sells various specialty chemical product lines, including specialty paints, protective coatings, roofing systems, sealants and adhesives, focusing on the maintenance of industrial, specialty and consumer markets. The Company operates through three segments: the industrial reportable segment (industrial segment), the specialty reportable segment (specialty segment) and the consumer reportable segment (consumer segment). Its family of products includes those marketed under brand names, such as API, Carboline, CAVE, DAP, Day-Glo, Dri-Eaz, Dryvit, Euclid, EUCO, Fibergrate, Flecto, Flowcrete, Grupo PV, Hummervoll, illbruck, Mohawk, Rust-Oleum, Stonhard, TCI, Toxement, Tremco, Tuf-Strand, Universal Sealants, Viapol, Watco and Zinsser. As of May 31, 2016, its subsidiaries marketed products in approximately 164 countries and territories, and operated manufacturing facilities in approximately 120 locations.

PPG Industries Company Profile

PPG Industries, Inc. manufactures and distributes a range of coatings and specialty materials. The Company has three segments: Performance Coatings, Industrial Coatings and Glass. 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 Glass segment includes the North American fiber glass business. 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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