PPG Industries (NYSE:PPG) & NewMarket (NYSE:NEU) Head-To-Head Survey

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

Institutional and Insider Ownership

81.9% of PPG Industries shares are held by institutional investors. Comparatively, 61.1% of NewMarket shares are held by institutional investors. 0.3% of PPG Industries shares are held by insiders. Comparatively, 19.1% of NewMarket shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

PPG Industries has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, NewMarket has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Valuation and Earnings

This table compares PPG Industries and NewMarket”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PPG Industries	$15.88 billion	1.37	$1.58 billion	$6.94	13.99
NewMarket	$2.73 billion	2.12	$418.75 million	$44.42	13.83

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for PPG Industries and NewMarket, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PPG Industries	0	10	7	1	2.50
NewMarket	0	0	1	0	3.00

PPG Industries presently has a consensus price target of $125.86, indicating a potential upside of 29.59%. Given PPG Industries’ higher probable upside, analysts clearly believe PPG Industries is more favorable than NewMarket.

Dividends

PPG Industries pays an annual dividend of $2.84 per share and has a dividend yield of 2.9%. NewMarket pays an annual dividend of $12.00 per share and has a dividend yield of 2.0%. PPG Industries pays out 40.9% of its earnings in the form of a dividend. NewMarket pays out 27.0% 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. PPG Industries has increased its dividend for 54 consecutive years and NewMarket has increased its dividend for 7 consecutive years. PPG Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PPG Industries	9.93%	22.30%	7.87%
NewMarket	15.37%	25.38%	12.73%

Summary

PPG Industries beats NewMarket on 10 of the 18 factors compared between the two stocks.

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.

About NewMarket

NewMarket Corporation, through its subsidiaries, primarily engages in the manufacture and sale of petroleum additives. The company offers lubricant additives for use in various vehicle and industrial applications, including engine oils, transmission fluids, off-road powertrain and hydraulic systems, gear oils, hydraulic oils, turbine oils, and other applications where metal-to-metal moving parts are utilized; engine oil additives designed for passenger cars, motorcycles, on and off-road heavy duty commercial equipment, locomotives, and engines in ocean-going vessels; driveline additives designed for products, such as transmission fluids, axle fluids, and off-road powertrain fluids; and industrial additives designed for products for industrial applications consisting of hydraulic fluids, grease, industrial gear fluids, and industrial specialty applications, such as turbine oils. It also provides fuel additives that are used to enhance the oil refining process and the performance of gasoline, diesel, biofuels, and other fuels to industry, government, original equipment manufacturers, and individual customers. In addition, the company engages in the marketing of antiknock compounds, as well as contracted manufacturing and services activities; and owns and manages a real property in Virginia. It operates in North America, Latin America, Asia Pacific, Europe, the Middle East, Africa, and India. NewMarket Corporation was founded in 1887 and is headquartered in Richmond, Virginia.