Head to Head Analysis: PPG Industries (NYSE:PPG) vs. Hawkins (NASDAQ:HWKN)

Hawkins (NASDAQ:HWKN) and PPG Industries (NYSE:PPG) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Insider and Institutional Ownership

69.7% of Hawkins shares are held by institutional investors. Comparatively, 81.9% of PPG Industries shares are held by institutional investors. 4.1% of Hawkins shares are held by company insiders. Comparatively, 0.3% of PPG Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Hawkins has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, PPG Industries has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Valuation & Earnings

This table compares Hawkins and PPG Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hawkins	$974.43 million	3.14	$84.35 million	$3.98	36.85
PPG Industries	$15.85 billion	1.47	$1.12 billion	$4.41	23.48

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

Dividends

Hawkins pays an annual dividend of $0.76 per share and has a dividend yield of 0.5%. PPG Industries pays an annual dividend of $2.84 per share and has a dividend yield of 2.7%. Hawkins pays out 19.1% of its earnings in the form of a dividend. PPG Industries pays out 64.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hawkins has increased its dividend for 20 consecutive years and PPG Industries has increased its dividend for 54 consecutive years. PPG Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hawkins	7.95%	17.42%	9.64%
PPG Industries	6.35%	23.61%	8.28%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Hawkins and PPG Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hawkins	1	1	3	0	2.40
PPG Industries	1	9	7	1	2.44

Hawkins currently has a consensus target price of $162.50, suggesting a potential upside of 10.80%. PPG Industries has a consensus target price of $122.54, suggesting a potential upside of 18.32%. Given PPG Industries’ stronger consensus rating and higher possible upside, analysts plainly believe PPG Industries is more favorable than Hawkins.

Summary

PPG Industries beats Hawkins on 12 of the 18 factors compared between the two stocks.

About Hawkins

Hawkins, Inc. operates as a specialty chemical and ingredients company in the United States. It operates through three segments: Industrial, Water Treatment, and Health and Nutrition. The Industrial segment offers industrial chemicals, products, and services to agriculture, chemical processing, electronics, energy, food, pharmaceutical, and plating industries. This segment manufactures sodium hypochlorite and agricultural products, as well as various food-grade and pharmaceutical products, such as liquid phosphates, lactates, other blended products, and agricultural products; and receives, stores, and distributes various chemicals comprising liquid caustic soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid, aqua ammonia, and potassium hydroxide. It also repackages water treatment chemicals and bulk industrial chemicals; and performs custom blending of chemicals. The Water Treatment segment provides chemicals, products, equipment, services, and solutions for potable water, municipal and industrial wastewater, industrial process water, non-residential swimming pool water, and agriculture water. The Health and Nutrition segment offers ingredient distribution, processing, and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, and health and wellness products. Its products portfolio includes minerals, vitamins and amino acids, excipients, joint products, botanicals and herbs, sweeteners, and enzymes. Hawkins, Inc. was founded in 1938 and is headquartered in Roseville, Minnesota.

About PPG Industries

PPG Industries, Inc. manufactures and distributes paints, coatings, and specialty materials in the United States, Canada, the Asia Pacific, Latin America, Europe, the Middle East, and Africa. It operates through two segments, Performance Coatings and Industrial Coatings. The Performance Coatings segment offers coatings, solvents, adhesives, sealants, sundries, and software for automotive and commercial transport/fleet repair and refurbishing, light industrial coatings, and specialty coatings for signs; wood stains; paints, thermoplastics, pavement marking products, and other advanced technologies for pavement marking for government, commercial infrastructure, painting, and maintenance contractors; and coatings, sealants, transparencies, transparent armor, adhesives, engineered materials, and packaging and chemical management services for commercial, military, regional jet, and general aviation aircraft. The Industrial Coatings segment offers coatings, adhesives and sealants, and metal pretreatments, as well as services and coatings applications for appliances, agricultural and construction equipment, consumer electronics, automotive parts and accessories, building products, kitchenware, and transportation vehicles and other finished products; and on-site coatings services. It also provides coatings for metal cans, closures, plastic and aluminum tubes for food, beverage and personal care, promotional, and specialty packaging; amorphous precipitated silica for tire, battery separator, and other end-uses; TESLIN substrates for labels, e-passports, drivers' licenses, breathable membranes, and loyalty and identification cards; and organic light emitting diode materials, displays and lighting lens materials, optical lenses, color-change products, and photochromic dyes. PPG Industries, Inc. was incorporated in 1883 and is headquartered in Pittsburgh, Pennsylvania.