Contrasting Ashland (NYSE:ASH) and PPG Industries (NYSE:PPG)

Ashland (NYSE:ASH) and PPG Industries (NYSE:PPG) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.

Dividends

Ashland pays an annual dividend of $1.66 per share and has a dividend yield of 3.5%. PPG Industries pays an annual dividend of $2.84 per share and has a dividend yield of 3.0%. Ashland pays out -8.9% 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. Ashland has increased its dividend for 16 consecutive years and PPG Industries has increased its dividend for 54 consecutive years. Ashland is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Ashland and PPG Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ashland	$1.87 billion	1.17	$169.00 million	($18.73)	-2.55
PPG Industries	$15.69 billion	1.36	$1.12 billion	$4.41	21.51

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

Insider and Institutional Ownership

93.9% of Ashland shares are held by institutional investors. Comparatively, 81.9% of PPG Industries shares are held by institutional investors. 1.0% of Ashland 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 large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Ashland has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, PPG Industries has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Ashland and PPG Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ashland	2	4	4	0	2.20
PPG Industries	0	8	6	1	2.53

Ashland currently has a consensus target price of $60.43, indicating a potential upside of 26.28%. PPG Industries has a consensus target price of $124.30, indicating a potential upside of 31.06%. Given PPG Industries’ stronger consensus rating and higher probable upside, analysts clearly believe PPG Industries is more favorable than Ashland.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ashland	-46.01%	6.82%	3.26%
PPG Industries	6.35%	24.17%	9.91%

Summary

PPG Industries beats Ashland on 14 of the 18 factors compared between the two stocks.

About Ashland

Ashland Inc. provides additives and specialty ingredients in the North and Latin America, Europe, Asia Pacific, and internationally. It operates through Life Sciences, Personal Care, Specialty Additives, and Intermediates segments. The Life Sciences segment offers pharmaceutical solutions, including controlled release polymers, disintegrants, tablet coatings, thickeners, solubilizers, and tablet binders; nutrition solutions, such as thickeners, stabilizers, emulsifiers, and additives; and nutraceutical solutions comprising products for weight management, joint comfort, stomach and intestinal health, sports nutrition, and general wellness, as well as custom formulation, toll processing, and particle engineering solutions. Its Personal Care segment provides a range of nature-based, biodegradable, and performance ingredients; solutions for toothpastes, mouth washes and rinses, denture cleaning, and care for teeth; and household supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers. The Specialty Additives segment offers rheology modifiers, foam control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, environmental filters, ingredients for the manufacturing of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals, and alloys for welding. Its Intermediates segment produces 1,4 butanediol and related derivatives, including n-methylpyrrolidone. It offers its products to customers in a range of consumer and industrial markets, such as architectural coatings, construction, energy, food and beverage, nutraceuticals, personal care, and pharmaceutical. The company was formerly known as Ashland Global Holdings Inc. and changed its name to Ashland Inc. in August 2022. Ashland Inc. was founded in 1924 and is headquartered in Wilmington, Delaware.

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.