PPG Industries (
), which makes glass, paints and coatings, is at the upper end of
its buy range after breaking out of a flat base. It's climbed 61%
this year and offers a dividend yield of 1.77%.
The stock broke out above its 128.52 flat-base buy point Dec.
14 in huge volume. It's at a new high and 5% above the buy
On Monday, Morgan Stanley upgraded the stock to overweight,
comparing it favorably to rivalsValspar (
) and IBD 50 stockSherwin-Williams (
PPG has a 93 Composite Rating, second in the Chemicals-Paints
industry group behind Sherwin-Williams. Its 93 Relative Price
Strength Rating and B Accumulation-Distribution Rating are
highest in the group, which was ranked 49th out of 197 as of
"PPG is a technically strong coatings company with broader
scope and scale than Sherwin-Williams or Valspar. PPG has a far
larger and more diverse presence globally and it has a far
stronger position with global OEM manufacturers," Morgan Stanley
It added that financial returns for the industry are
understated due to the lingering effects of construction
downturns in North America and Europe, and weak industrial demand
PPG's products are used in industries ranging from auto,
aerospace and construction. It earns about 40% of revenue in the
U.S. with the rest spread across the globe.
The company's fundamentals are mixed. Profit growth has
averaged just 18% over the past three quarters, and revenue
growth has also been weak.
The company was hit hard during the 2008-09 recession but has
recovered on the back of stronger global manufacturing growth and
a rebound in the U.S. housing market. Profit is seen rising 17%
this year, which would mark the third straight annual gain.
PPG's 61% stock gain this year has far outpaced the S&P
500's 13% increase. Meanwhile, the company earlier this year
boosted its quarterly dividend payment by 0.02, or 4%, to 59
cents a share. That's good for an annual dividend yield of 1.8%,
just below the S&P average of 2.1%. The company has paid a
dividend every year since 1899.