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

Institutional and Insider Ownership

71.8% of PPG Industries shares are owned by institutional investors. 0.7% of PPG Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Axalta Coating Systems and PPG Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Axalta Coating Systems 1 7 6 0 2.36
PPG Industries 0 9 6 0 2.40

Axalta Coating Systems currently has a consensus price target of $33.62, suggesting a potential upside of 19.71%. PPG Industries has a consensus price target of $113.93, suggesting a potential upside of 8.36%. Given Axalta Coating Systems’ higher probable upside, equities research analysts plainly believe Axalta Coating Systems is more favorable than PPG Industries.

Dividends

PPG Industries pays an annual dividend of $1.60 per share and has a dividend yield of 1.5%. Axalta Coating Systems does not pay a dividend. PPG Industries pays out 41.7% of its earnings in the form of a dividend. Axalta Coating Systems has raised its dividend for 44 consecutive years.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Axalta Coating Systems $4.15 billion 1.64 $875.60 million N/A N/A
PPG Industries $14.85 billion 1.82 $2.56 billion $3.84 27.38

PPG Industries has higher revenue and earnings than Axalta Coating Systems.

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 6.50% 21.46% 4.47%
PPG Industries 6.79% 29.47% 9.49%

Summary

PPG Industries beats Axalta Coating Systems on 10 of the 14 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 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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