PPG Industries (NYSE:PPG) versus Celanese (NYSE:CE) Financial Contrast

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

Insider and Institutional Ownership

81.9% of PPG Industries shares are held by institutional investors. Comparatively, 98.9% of Celanese shares are held by institutional investors. 0.3% of PPG Industries shares are held by company insiders. Comparatively, 0.3% of Celanese shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PPG Industries	$15.85 billion	1.49	$1.12 billion	$4.41	23.69
Celanese	$10.28 billion	0.44	-$1.52 billion	($14.82)	-2.81

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

Risk & Volatility

PPG Industries has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500. Comparatively, Celanese has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.

Dividends

PPG Industries pays an annual dividend of $2.84 per share and has a dividend yield of 2.7%. Celanese pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. PPG Industries pays out 64.4% of its earnings in the form of a dividend. Celanese pays out -0.8% 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.

Profitability

This table compares PPG Industries and Celanese’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%
Celanese	-16.30%	10.48%	2.70%

Analyst Ratings

This is a summary of current ratings and price targets for PPG Industries and Celanese, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PPG Industries	0	8	6	1	2.53
Celanese	3	10	7	0	2.20

PPG Industries currently has a consensus price target of $125.00, suggesting a potential upside of 19.63%. Celanese has a consensus price target of $56.11, suggesting a potential upside of 34.79%. Given Celanese’s higher probable upside, analysts plainly believe Celanese is more favorable than PPG Industries.

Summary

PPG Industries beats Celanese on 14 of the 18 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 Celanese

Celanese Corporation, a chemical and specialty materials company, manufactures and sells high performance engineered polymers in the United States and internationally. It operates through Engineered Materials and Acetyl Chain. The Engineered Materials segment develops, produces, and supplies specialty polymers for automotive and medical applications, as well as for use in industrial products and consumer electronics. The Acetyl Chain segment produces and supplies acetyl products, including acetic acid, vinyl acetate monomers, acetic anhydride, and acetate esters that are used as starting materials for colorants, paints, adhesives, coatings, and pharmaceuticals; and organic solvents and intermediates for pharmaceutical, agricultural, and chemical products. It also offers vinyl acetate-based emulsions for use in paints and coatings, adhesives, construction, glass fiber, textiles, and paper applications; and ethylene vinyl acetate resins and compounds, as well as low-density polyethylene for use in flexible packaging films, lamination film products, hot melt adhesives, automotive parts, and carpeting applications. In addition, it provides redispersible powders (RDP) for use in construction applications, including flooring, plasters, insulation, tiling, and waterproofing. Celanese Corporation was founded in 1918 and is headquartered in Irving, Texas.