Head-To-Head Analysis: PPG Industries (NYSE:PPG) vs. Asahi Kasei (OTCMKTS:AHKSY)

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

Analyst Ratings

This is a breakdown of current ratings for Asahi Kasei and PPG Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Asahi Kasei	0	1	0	1	3.00
PPG Industries	0	9	8	0	2.47

PPG Industries has a consensus price target of $126.44, suggesting a potential upside of 19.79%. Given PPG Industries’ higher possible upside, analysts clearly believe PPG Industries is more favorable than Asahi Kasei.

Risk & Volatility

Asahi Kasei has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, PPG Industries has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Earnings and Valuation

This table compares Asahi Kasei and PPG Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Asahi Kasei	$20.42 billion	0.69	$1.05 billion	$1.84	11.04
PPG Industries	$16.42 billion	1.43	$1.58 billion	$6.98	15.12

PPG Industries has lower revenue, but higher earnings than Asahi Kasei. Asahi Kasei 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 Asahi Kasei and PPG Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Asahi Kasei	6.10%	8.58%	4.31%
PPG Industries	9.57%	21.07%	7.80%

Dividends

Asahi Kasei pays an annual dividend of $0.33 per share and has a dividend yield of 1.6%. PPG Industries pays an annual dividend of $2.96 per share and has a dividend yield of 2.8%. Asahi Kasei pays out 17.9% of its earnings in the form of a dividend. PPG Industries pays out 42.4% 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.

Insider & Institutional Ownership

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

Summary

PPG Industries beats Asahi Kasei on 14 of the 18 factors compared between the two stocks.

About Asahi Kasei

Asahi Kasei Corporation manufactures and sells chemicals. It offers caustic soda, chemical fertilizers, nitric acid, ammonia, acrylonitrile, methyl methacrylate, styrene, adipic acid, hexamethylene diamine, AH salt, propionitrile, sodium cyanide, acetonitrile, methacrylonitrile, cyclohexyl methacrylate, polyethylenes, polyethylenes powder, PMMA resin, polystyrene, polybutadiene rubbers, styrene/butadiene rubbers, clear styrenic copolymer, styrenic thermoplastic elastomer, hydrogenated styrenic elastomers, membranes and systems, functional materials, foams, purging compound, polyisocyanates, polycarbonatediol, aluminum paste, latex, photopolymers and platemaking systems, films, cyclohexanol, cyclohexane, and cyclohexene. The company also offers lithium-ion battery and lead-acid battery separators, plastic optical fibers, artificial suede, nylon 66 filament, polyamide 66, polyacetal, polyphenyene ether, polypropylene compounds, 3D cubic knitted fabric, noise suppression sheets, audio devices, photosensitive polyimide/PBO precursor, latent hardeners, glass fabrics, specialty products, explosion-bonded metal clads, lining fabrics, cupro and stretch fibers, oil-water separators, cellulose nanobeads, and flame-resistant and synthetic fiber; magnetic, current, and gas sensors; deodorizing, spunbond, cupro, multifunctional, and heat-press formable thermoplastic nonwoven; and ecorise, biocradle, and bemliese products. It provides bags and containers; cooking products; cleaners; plastic packet cutting products; cyclohexyl methacrylate, bonded anchors, and microcrystalline cellulose; pharmaceuticals and diagnostic reagents, dialyzers, therapeutic apheresis, virus removal filters, defibrillators, AEDs, automated CPRs, fluid resuscitation pumps, wearable defibrillators, temperature management systems, and data solutions; construction materials; and remodeling services, as well as develops homes and apartments. The company was founded in 1922 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.