Comparing RPM International (RPM) & Axalta Coating Systems (AXTA)

RPM International (NYSE: RPM) and Axalta Coating Systems (NYSE:AXTA) are both mid-cap construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Earnings and Valuation

This table compares RPM International and Axalta Coating Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
RPM International $4.96 billion 1.39 $181.82 million $1.35 38.12
Axalta Coating Systems $4.07 billion 1.90 $41.80 million $0.24 132.46

RPM International has higher revenue and earnings than Axalta Coating Systems. RPM International is trading at a lower price-to-earnings ratio than Axalta Coating Systems, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

RPM International has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500. Comparatively, Axalta Coating Systems has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500.

Dividends

RPM International pays an annual dividend of $1.28 per share and has a dividend yield of 2.5%. Axalta Coating Systems does not pay a dividend. RPM International pays out 94.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RPM International has increased its dividend for 42 consecutive years.

Profitability

This table compares RPM International and Axalta Coating Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RPM International 3.67% 24.73% 7.07%
Axalta Coating Systems 1.46% 19.91% 4.30%

Insider and Institutional Ownership

73.2% of RPM International shares are held by institutional investors. Comparatively, 95.7% of Axalta Coating Systems shares are held by institutional investors. 2.1% of RPM International shares are held by insiders. Comparatively, 2.3% of Axalta Coating Systems shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for RPM International and Axalta Coating Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RPM International 0 4 3 0 2.43
Axalta Coating Systems 1 6 9 0 2.50

RPM International currently has a consensus target price of $57.33, indicating a potential upside of 11.41%. Axalta Coating Systems has a consensus target price of $33.64, indicating a potential upside of 5.83%. Given RPM International’s higher probable upside, research analysts plainly believe RPM International is more favorable than Axalta Coating Systems.

Summary

RPM International beats Axalta Coating Systems on 9 of the 17 factors compared between the two stocks.

About RPM International

RPM International Inc., through its subsidiaries, manufactures, markets and sells various specialty chemical product lines, including specialty paints, protective coatings, roofing systems, sealants and adhesives, focusing on the maintenance of industrial, specialty and consumer markets. The Company operates through three segments: the industrial reportable segment (industrial segment), the specialty reportable segment (specialty segment) and the consumer reportable segment (consumer segment). Its family of products includes those marketed under brand names, such as API, Carboline, CAVE, DAP, Day-Glo, Dri-Eaz, Dryvit, Euclid, EUCO, Fibergrate, Flecto, Flowcrete, Grupo PV, Hummervoll, illbruck, Mohawk, Rust-Oleum, Stonhard, TCI, Toxement, Tremco, Tuf-Strand, Universal Sealants, Viapol, Watco and Zinsser. As of May 31, 2016, its subsidiaries marketed products in approximately 164 countries and territories, and operated manufacturing facilities in approximately 120 locations.

About Axalta Coating Systems

Axalta Coating Systems Ltd. is a holding company. The Company is a manufacturer, marketer and distributor of coatings systems primarily serving the transportation industry. The Company’s segments include Performance Coatings and Transportation Coatings. Through its Performance Coatings segment, the Company provides liquid and powder coatings solutions to a fragmented and local customer base. Through its Transportation Coatings segment, the Company provides coating technologies to original equipment manufacturers (OEMs) of light and commercial vehicles. The Performance Coatings segment serves various end markets, including refinish and industrial. The Company develops, markets and supplies a portfolio of coatings systems and color matching technologies. The Company also develops and supplies an array of coatings systems for a range of commercial applications, including heavy-duty truck (HDT), bus, rail and agricultural construction equipment (ACE).

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