Shares of PPG Industries ( PPG) reached a new 52-week high of $198.15 on Feb 28, above its previous high of $194.67. Its shares rose $4.13 (or 2.1%) to end the trading session at $197.82 on that day.
The Pittsburgh-based coatings giant, which has a market cap of $27.4 billion, has seen its shares pop roughly 49% over a year. Average volume of shares traded over the last three months is around 938.6K.
What’s Driving PPG Up?
PPG Industries saw its profit jump in fourth-quarter 2013, reported on Jan 16, on strength in its coatings business and its cost management initiatives. Adjusted earnings of $1.81 per share topped the Zacks Consensus Estimate by 8 cents. Healthy momentum across aerospace and automotive markets aided the results. PPG Industries envisions favorable market conditions across these end-markets in 2014.
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.
PPG Industries is taking steps to grow its business inorganically by making a number of acquisitions. The acquisition of Akzo Nobel’s ( AKZOY) North American architectural coatings business has reinforced its branded paint product offerings and scale in the North American architectural paint market.
PPG Industries also has an impressive record of returning cash to shareholders through dividends and share buybacks. It has returned $1.35 billion to its shareholders in form of dividends and share repurchases last year.
Moreover, PPG Industries is pursuing a $102 million business restructuring focused on achieving cost synergies associated with the North American architectural coatings business takeover. The company’s growth strategies coupled with cost-control measures delivered significant value to its shareholders in 2013 and is expected to do the same in 2014.
That said, we take into account softness in Europe and a still-challenging demand environment in the region. Some of PPG Industries’ key end-markets such as non-residential construction, protective and marine coatings and European architectural coatings remain sluggish.
PPG Industries is a Zacks Rank #2 (Buy) stock.
Other Stocks to Consider
Other companies in the chemical space with favorable Zacks Rank are Northern Technologies International Corp. ( NTIC) and The Dow Chemical Co. ( DOW). While Northern Technologies holds a Zacks Rank #1 (Strong Buy), Dow Chemical is a Zacks Rank #2 (Buy) stock.