Cash In on Global Growth
03/01/2013 10:30 am EST
Especially as growth in China and Asia accelerates, look for this company to benefit handsomely, writes Louis Navellier of Blue Chip Growth.
PPG Industries (PPG) supplies paints and coatings. At first glance, PPG Industries seems a lot like Sherwin Williams (SHW), but that's not a bad thing, because SHW remains one of my favorite stocks and is again on our Top Five list this month.
The big difference between the two is that PPG has several key businesses outside of performance coatings, including adhesives, commodity chemicals, and fiberglass. PPG Industries also produces paints and stains for commercial and residential markets, but the bulk of this company's products are designed for aerospace, automotive, defense, and industrial applications.
PPG also pays out one of the highest dividends in the industry, with a 1.7% annual yield. The company has a strong dividend track record, having raised its payout 12 years in a row.
Recently, PPG announced record results for the fourth quarter. Compared with fourth-quarter 2011, net income climbed 5% to $277 million. Adjusted earnings weighed in at $1.53 per share, which matched the consensus estimate. Over the same period, net sales advanced 4% to $3.65 billion, topping the $3.59 consensus sales estimate.
That's not eye-popping growth, but the best is yet to come, which is why PPG's buying pressure is strong, and we want to get in now. Analysts actually estimate a slight drop in sales and earnings this quarter, but that should be priced into the stock already, and the Street expects double-digit earnings growth for all of 2013.
Management is particularly excited about the automotive finishing market in Asia and the architectural coatings market in the US. With robust evidence that worldwide economic growth is picking up as China's imports and exports surge, the company is well poised to benefit from the global economic recovery.