Financial Review: PPG Industries (NYSE:PPG) versus American Vanguard (NYSE:AVD)

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

Analyst Ratings

This is a breakdown of current ratings and target prices for PPG Industries and American Vanguard, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PPG Industries	0	8	6	1	2.53
American Vanguard	1	0	1	0	2.00

PPG Industries currently has a consensus price target of $125.00, indicating a potential upside of 20.86%. American Vanguard has a consensus price target of $12.00, indicating a potential upside of 124.93%. Given American Vanguard’s higher possible upside, analysts clearly believe American Vanguard is more favorable than PPG Industries.

Earnings & Valuation

This table compares PPG Industries and American Vanguard”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PPG Industries	$15.85 billion	1.47	$1.12 billion	$4.41	23.45
American Vanguard	$547.31 million	0.28	-$126.34 million	($4.47)	-1.19

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PPG Industries	6.25%	23.85%	8.40%
American Vanguard	-23.72%	-26.21%	-9.97%

Risk and Volatility

PPG Industries has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, American Vanguard has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.

Insider and Institutional Ownership

81.9% of PPG Industries shares are owned by institutional investors. Comparatively, 79.0% of American Vanguard shares are owned by institutional investors. 0.3% of PPG Industries shares are owned by insiders. Comparatively, 7.6% of American Vanguard shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

PPG Industries beats American Vanguard on 12 of the 15 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 American Vanguard

American Vanguard Corporation, through its subsidiaries, develops, manufactures, and markets specialty chemicals for agricultural, commercial, and consumer uses in the United States and internationally. It manufactures and formulates chemicals, including insecticides, fungicides, herbicides, soil health, plant nutrition, molluscicides, growth regulators, soil fumigants, and biorationals in liquid, powder, and granular forms for crops, turf and ornamental plants, and human and animal health protection. The company also markets, sells, and distributes end-use chemical and biological products for crop applications; and distributes chemicals for turf and ornamental markets. It distributes its products through national distribution companies, and buying groups or co-operatives; and through sales offices, sales force executives, sales agents, and wholly owned distributors. American Vanguard Corporation was incorporated in 1969 and is headquartered in Newport Beach, California.