U.S. Markets closed
  • S&P 500

    3,841.94
    +73.47 (+1.95%)
     
  • Dow 30

    31,496.30
    +572.16 (+1.85%)
     
  • Nasdaq

    12,920.15
    +196.68 (+1.55%)
     
  • Russell 2000

    2,192.21
    +45.29 (+2.11%)
     
  • Crude Oil

    66.28
    +2.45 (+3.84%)
     
  • Gold

    1,698.20
    -2.50 (-0.15%)
     
  • Silver

    25.30
    -0.17 (-0.65%)
     
  • EUR/USD

    1.1916
    -0.0063 (-0.5243%)
     
  • 10-Yr Bond

    1.5540
    +0.0040 (+0.26%)
     
  • Vix

    24.66
    -3.91 (-13.69%)
     
  • GBP/USD

    1.3834
    -0.0060 (-0.4344%)
     
  • USD/JPY

    108.3600
    +0.3840 (+0.3556%)
     
  • BTC-USD

    50,655.64
    +2,963.50 (+6.21%)
     
  • CMC Crypto 200

    982.93
    +39.75 (+4.21%)
     
  • FTSE 100

    6,630.52
    -20.36 (-0.31%)
     
  • Nikkei 225

    28,864.32
    -65.79 (-0.23%)
     

Should Income Investors Look At PPG Industries, Inc. (NYSE:PPG) Before Its Ex-Dividend?

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that PPG Industries, Inc. (NYSE:PPG) is about to go ex-dividend in just four days. If you purchase the stock on or after the 18th of February, you won't be eligible to receive this dividend, when it is paid on the 12th of March.

PPG Industries's next dividend payment will be US$0.54 per share, and in the last 12 months, the company paid a total of US$2.16 per share. Based on the last year's worth of payments, PPG Industries stock has a trailing yield of around 1.6% on the current share price of $138.55. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

View our latest analysis for PPG Industries

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. PPG Industries paid out a comfortable 47% of its profit last year.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That explains why we're not overly excited about PPG Industries's flat earnings over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, PPG Industries has lifted its dividend by approximately 7.2% a year on average.

To Sum It Up

Is PPG Industries an attractive dividend stock, or better left on the shelf? PPG Industries's earnings per share have not grown at all in recent years, although we like that it is paying out a low percentage of its earnings. Overall, PPG Industries looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

While it's tempting to invest in PPG Industries for the dividends alone, you should always be mindful of the risks involved. Case in point: We've spotted 1 warning sign for PPG Industries you should be aware of.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.