PPG IndustriesPPG and Universal Display Corporation OLED announced that the latter will invest $15 million in PPG's Barberton, OH manufacturing plant to double commercial production of Universal Display's proprietary UniversalPHOLED phosphorescent emitter products. The expansion project is expected to be completed in the third quarter of 2017.
PPG is the exclusive manufacturer for Universal Display of UniversalPHOLED emitter materials which enable energy-efficient display of personal electronics and solid-state lighting applications. The organic light-emitting diode ("OLED") materials production facility at Barberton, OH, which is wholly owned and operated by PPG provides the two companies with the required resources. This expansion will allow the companies to meet increasing customer demand for energy-efficient displays and lighting devices.
PPG Industries has underperformed the Zacks categorized Chemicals-Diversified industry over the past three months, affected by weak growth in global demand for its products amid a difficult global operating environment. The company's shares have gained around 5% over this period, compared with roughly 10.3% growth recorded by the industry.
However, PPG Industries has a diversified business, both in terms of products offered and geographical presence. The company's strong presence in emerging regions has enabled it to deliver growth to shareholders by tapping opportunities there. PPG Industries is also taking steps to grow its business through acquisitions.
PPG Industries has announced certain restructuring measures to lower its cost structure globally. Special emphasis will be put on regions and end-use markets with the weakest business. The restructuring actions are expected to deliver $120-$130 million in annual savings, with $40-$50 million of savings expected to be realized in 2017.
PPG Industries also has an impressive record of returning cash to shareholders through dividends and share buybacks. The company returned nearly $1.5 billion to its shareholders in the form of dividend and share repurchases in 2016. The company also raised its quarterly dividend by 11% in 2016.
However, PPG Industries is exposed to unfavorable currency exchange translation, especially in emerging markets. The company continues to face macroeconomic challenges. It sees an uneven growth in emerging economies in 2017. The company is also exposed to volatility in raw materials and energy costs.
PPG Industries, Inc. Price and Consensus
PPG Industries currently carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Some better-ranked companies in the chemical industry include Kronos Worldwide Inc KRO and Methanex Corp. MEOH , both sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Kronos Worldwide has long-term expected growth rate of 5%.
Methanex has long-term expected growth rate of 15%.
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