Financial Contrast: PPG Industries (NYSE:PPG) & Toray Industries (OTCMKTS:TRYIY)

Toray Industries (OTCMKTS:TRYIY) and PPG Industries (NYSE:PPG) are both large-cap basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Volatility and Risk

Toray Industries has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, PPG Industries has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Toray Industries	1.71%	2.38%	1.30%
PPG Industries	9.93%	22.67%	7.90%

Earnings & Valuation

This table compares Toray Industries and PPG Industries”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toray Industries	$16.83 billion	0.74	$514.21 million	$0.39	42.56
PPG Industries	$15.88 billion	1.82	$1.58 billion	$6.94	18.60

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

Insider & Institutional Ownership

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

Dividends

Toray Industries pays an annual dividend of $0.15 per share and has a dividend yield of 0.9%. PPG Industries pays an annual dividend of $2.84 per share and has a dividend yield of 2.2%. Toray Industries pays out 38.5% of its earnings in the form of a dividend. PPG Industries pays out 40.9% 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. PPG Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Toray Industries and PPG Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toray Industries	0	2	0	0	2.00
PPG Industries	0	11	7	1	2.47

PPG Industries has a consensus target price of $124.79, suggesting a potential downside of 3.34%. Given PPG Industries’ stronger consensus rating and higher probable upside, analysts plainly believe PPG Industries is more favorable than Toray Industries.

Summary

PPG Industries beats Toray Industries on 15 of the 18 factors compared between the two stocks.

About Toray Industries

Toray Industries, Inc., together with its subsidiaries, manufactures, processes, and sells fibers and textiles, performance chemicals, carbon fiber composite materials, environment and engineering products, and life science products in Japan, China, North America, Europe, and internationally. The company offers filament yarns, staple fibers, and spun yarns, as well as woven and knitted fabrics of nylon, polyester, acrylics, and others; non-woven fabrics; ultra-fine fibers; and apparel products. It also provides nylon, ABS, PBT, PPS, and other resins and molded products; polyolefin foam products; polyester, polyethylene, polypropylene, and other films; processed film products; raw materials for synthetic fibers and other plastics; fine chemicals; electronic and information materials; and graphic materials. In addition, the company offers carbon fibers, carbon fiber composite materials, and molded products; analysis, physical evaluation, research, and other services; and pharmaceuticals, medical devices, etc. Further, it provides engineering services; condominiums; industrial equipment and machinery; IT-related equipment; water treatment membranes and related equipment; and materials for housing, building, and civil engineering applications. The company was formerly known as Toyo Rayon Co., Ltd. and changed its name to Toray Industries, Inc. in 1970. The company was incorporated in 1926 and is headquartered in Tokyo, Japan.

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.