Westlake (NYSE:WLK) versus PPG Industries (NYSE:PPG) Head-To-Head Review

PPG Industries (NYSE:PPG) and Westlake (NYSE:WLK) are both materials companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Dividends

PPG Industries pays an annual dividend of $2.96 per share and has a dividend yield of 2.7%. Westlake pays an annual dividend of $2.13 per share and has a dividend yield of 3.1%. PPG Industries pays out 42.4% of its earnings in the form of a dividend. Westlake pays out -22.2% 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 and Westlake has increased its dividend for 21 consecutive years. Westlake is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

PPG Industries has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Westlake has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PPG Industries	$15.88 billion	1.51	$1.58 billion	$6.98	15.45
Westlake	$11.17 billion	0.79	-$1.51 billion	($9.58)	-7.18

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

Institutional and Insider Ownership

81.9% of PPG Industries shares are owned by institutional investors. Comparatively, 28.4% of Westlake shares are owned by institutional investors. 0.3% of PPG Industries shares are owned by insiders. Comparatively, 1.4% of Westlake shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PPG Industries	9.57%	21.07%	7.80%
Westlake	-10.94%	0.93%	0.44%

Analyst Recommendations

This is a summary of current recommendations and price targets for PPG Industries and Westlake, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PPG Industries	0	9	8	0	2.47
Westlake	1	10	4	0	2.20

PPG Industries currently has a consensus price target of $126.44, suggesting a potential upside of 17.25%. Westlake has a consensus price target of $93.79, suggesting a potential upside of 36.31%. Given Westlake’s higher possible upside, analysts clearly believe Westlake is more favorable than PPG Industries.

Summary

PPG Industries beats Westlake on 13 of the 17 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 Westlake

Westlake Corporation engages in the manufacture and marketing of performance and essential materials, and housing and infrastructure products in the United States, Canada, Germany, China, Mexico, Brazil, France, Italy, Taiwan, and internationally. The company operates through two segments: Performance and Essential Materials and Housing and Infrastructure Products. The Performance and Essential Materials segment offers ethylene, polyethylene, styrene, chlorinated derivative products, ethylene dichloride, vinyl chloride monomer, polyvinyl chloride (PVC), epoxy specialty resins, and base epoxy resins and intermediaries, as well as chlor-alkali, such as chlorine and caustic soda. The Housing and Infrastructure Products segment provides residential PVC sidings; PVC trim and mouldings; architectural stone veneers; windows; PVC decking; PVC films for various inflatables, wallcovering, and tape and roofing applications; polymer composite and cement roof tiles; PVC pipes and fittings for various water, sewer, electrical, and industrial applications; PVC compounds used in various housing, medical, and automobile products; and consumer and commercial products, such as landscape edging; industrial, home, and office matting; marine dock edging; and masonry joint controls. It offers its products to chemical processors, plastics fabricators, small construction contractors, municipalities, and supply warehouses for use in various consumer and industrial markets, including residential construction, flexible and rigid packaging, automotive products, healthcare products, water treatment, wind turbines, and coatings, as well as other durable and non-durable goods. The company was formerly known as Westlake Chemical Corporation and changed its name to Westlake Corporation in February 2022. Westlake Corporation was founded in 1986 and is headquartered in Houston, Texas. Westlake Corporation operates as a subsidiary of TTWF LP.