PPG Industries (PPG) continues its impressive record of returning cash to shareholders through higher dividends. The Pittsburgh-based coatings giant’s Board has approved a raise of 2 cents per share in the company’s quarterly dividend to 61 cents per share. Annualized, this represents a payout of $2.44 per share.
The revised dividend is payable on Jun 12, 2013, to shareholders of record as of May 10, 2013. This represents PPG Industries’ 42nd straight year of dividend increase.
The dividend increase is a testimony of the company’s healthy balance sheet. PPG Industries’ cash and cash equivalents more than doubled year over year to roughly $2 billion at the end of the recently reported quarter. Total debt fell 7% year over year to around $3.4 billion.
PPG Industries, on Apr 18, posted mixed first-quarter 2013 results. Adjusted earnings of $1.58 per share beat the Zacks Consensus Estimate of $1.56. Profit, as reported, climbed manifold on strength across automotive OEM and aerospace markets. A one-time gain on sale of the company’s commodity chemicals business boosted the bottom line.
Revenues were essentially flat year over year at $3,331 million, missing the Zacks Consensus Estimate of $3,424 million. Strong momentum across North America and Asia was somewhat masked by sustained weakness in Europe.
PPG Industries has a diversified business, both in terms of products offered and geographical presence. It has a leading position in several paints and coatings end markets. It is taking steps to grow its business inorganically by making a number of acquisitions.
PPG Industries sees mixed economic trends in 2013 with continued strength in North America, improvements in Asia and sustained weakness in Europe. The company is pursuing restructuring of its European operation, which is expected to fetch meaningful cost savings this year.
However, the European market is expected to remain under pressure and raw material inflation and currency headwinds remain concerns for the company.
PPG Industries currently holds a short-term Zacks Rank #3 (Hold).
Other companies in the chemical industry that are worth considering include Olin Corp. ( OLN), Eastman Chemical Co. ( EMN) and LyondellBasell Industries NV ( LYB). While Olin retains a Zacks Rank #1 (Strong Buy), both Eastman and LyondellBasell hold a Zacks Rank #2 (Buy).
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