PPG Industries Boosts Shareholders' Return - Analyst Blog
April 22 2014 - 03:00PM
Zacks
Coatings giant PPG
Industries Inc. (PPG) has increased its quarterly dividend
by 10% to 67 cents per share from the prior payout of 61 cents a
share. The raised dividend will be paid on Jun 12, 2014, to
stockholders of record as of May 12, 2014.
The dividend increase is a testimony of the company’s continuing
strong growth and cash-generation prospects. This action also plays
an important part in maintaining the company’s balanced
cash-deployment strategy.
Separately, the Board of PPG
Industries has authorized the repurchase of shares worth $2
billion. The authorization is effective immediately and does not
expire, which gives management the choice to determine the
conditions under which shares may be bought back. Share repurchases
will be made per the applicable securities laws in the open market
or in privately negotiated transactions.
The conditions applied on share
repurchases are that they may commence or cease without prior
notice depending on economic and equity market conditions,
magnitude of other cash uses, including pace and timing of
acquisitions, and other factors.
Prior to this, in Oct 2011, PPG
Industries’ Board authorized the repurchase of 10 million shares of
outstanding common stock. The company repurchased 1.1 million
shares (or $200 million) during the first quarter of 2014 to
complete the program.
These moves adopted by PPG
Industries testify its commitment to boost shareholders’ value
while retaining adequate funds for its future growth.
Shares of PPG Industries gained as
much as 4.4% in the trading session following these news coupled
with the announcement of its first-quarter 2014 results.
PPG Industries recorded adjusted
earnings from continuing operations (excluding acquisition-related
expenses of $2 million or a penny per share) of $1.98 a share for
first-quarter 2014, up 42% from $1.39 per share reported in the
year-ago quarter.
The company has delivered record
first-quarter adjusted earnings on the back of a strong coatings
portfolio, broad global footprint, aggressive cost discipline,
prudent cash deployment and targeted cost synergies received from
acquisitions.
Revenues rose 17% year over year to
$3,636 million in the reported quarter from $3,108 million in the
year-ago quarter. The year-over-year rise is attributable to higher
industry demand in aerospace and automotive original equipment
manufacturers (OEM) coatings. Results were also aided by
accelerated global volume growth across all regions including
Europe, where volumes grew due to economic recovery.
PPG Industries carries a Zacks Rank
#3 (Hold).
Some better-ranked stocks in the
chemical industry include Cabot Corporation (CBT),
Methanex Corp. (MEOH) and Huntsman
Corporation (HUN). While Cabot carries a Zacks Rank #1
(Strong Buy), Methanex and Huntsman retain a Zacks Rank #2
(Buy).
CABOT CORP (CBT): Free Stock Analysis Report
HUNTSMAN CORP (HUN): Free Stock Analysis Report
METHANEX CORP (MEOH): Free Stock Analysis Report
PPG INDS INC (PPG): Free Stock Analysis Report
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