May 25, 2025 a 03:31 pm
PPG: Dividend Analysis - PPG Industries, Inc.
PPG Industries, Inc. demonstrates a robust dividend history with a streak of 43 consecutive years of payments, highlighting its commitment to rewarding shareholders. The company's 2.38% dividend yield, while modest, aligns well with its steady growth in dividend payouts. This reliability, coupled with a prudent payout ratio, suggests a balanced approach between rewarding investors and retaining earnings for future growth.
Overview 📊
The company's dividend sustainability profile is reinforced by a sector-appropriate yield and a proven track record.
| Factor | Details |
|---|---|
| Sector | Manufacturing |
| Dividend yield | 2.38% |
| Current dividend per share | 2.66 USD |
| Dividend history | 43 years |
| Last cut or suspension | None |
Dividend History 🗣️
PPG's lengthy dividend history is indicative of financial stability and steady capital allocation.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.36 |
| 2024 | 2.66 |
| 2023 | 2.54 |
| 2022 | 2.42 |
| 2021 | 2.26 |
Dividend Growth 📈
The company's potential for increasing dividends bodes well for sustained shareholder returns.
| Time | Growth |
|---|---|
| 3 years | 5.58% |
| 5 years | 6.08% |
The average dividend growth is 6.08% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio ✅
A disciplined payout ratio reflects the company's ability to balance shareholder returns with reinvestment in the business.
| Key figure ratio | Value |
|---|---|
| EPS-based | 55.70% |
| Free cash flow-based | 74.93% |
A payout ratio of EPS 55.70% and FCF 74.93% indicates a responsible allocation of earnings to dividends while maintaining financial flexibility.
Cashflow & Capital Efficiency 💵
Cash flow metrics offer insights into operational efficiency and the company's capacity to generate free cash flow for dividends.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.50% | 5.28% | 1.50% |
| Earnings Yield | 4.00% | 3.60% | 3.46% |
| CAPEX to Operating Cash Flow | 50.77% | 22.77% | 53.79% |
| Stock-based Compensation to Revenue | 0.27% | 0.32% | 0.20% |
| Free Cash Flow/Operating Cash Flow Ratio | 49.23% | 77.23% | 46.21% |
The company's cash flow figures highlight prudent management of operational costs and capital expenses, providing a foundation for dividend security.
Balance Sheet & Leverage Analysis 💼
Analyzing leverage and liquidity provides insights into financial health and risk management.
| Ratio | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.94 | 0.88 | 1.16 |
| Debt-to-Assets | 0.33 | 0.32 | 0.37 |
| Debt-to-Capital | 0.49 | 0.47 | 0.54 |
| Net Debt to EBITDA | 1.96 | 2.06 | 2.75 |
| Current Ratio | 1.31 | 1.47 | 1.52 |
| Quick Ratio | 0.94 | 1.05 | 1.04 |
| Financial Leverage | 2.86 | 2.76 | 3.15 |
The company's leverage metrics show manageable levels of debt with improved solvency ratios, reinforcing overall financial robustness.
Fundamental Strength & Profitability 📊
Profitability measures and return metrics are key indicators of business efficiency and shareholder value creation.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 16.45% | 16.22% | 15.56% |
| Return on Assets | 5.74% | 5.87% | 4.95% |
| Net Margin | 7.04% | 6.96% | 5.81% |
| EBIT Margin | 13.21% | 10.94% | 8.91% |
| EBITDA Margin | 16.50% | 14.25% | 13.48% |
| Gross Margin | 41.61% | 41.36% | 37.14% |
| Research & Development to Revenue | 2.67% | 2.37% | 2.54% |
The company's stability in margins and return ratios illustrates effective cost management and consistent profitability, enhancing shareholder value.
Price Development 📉
Dividend Scoring System ✅
| Criteria | Score (1-5) | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 4 |
Overall Score: 32/40
Rating 📈
PPG Industries, Inc. maintains a favorable dividend profile characterized by stability and moderate growth. The company's well-managed payout and reinvestment strategy underscore its commitment to balancing shareholder returns with growth opportunities. Strong fundamentals and financial health contribute to a positive outlook for consistent dividend payouts. Investors may consider PPG a reliable addition to dividend-focused portfolios, expecting continued moderate growth and stable returns.