Since February when I wrote a last post (read more) shares are performing really well and again I was wrong – or too conservative. Quarter by quarter company is increasing adjusted EPS in a double-digit pace, which is an outstanding result for old-economy company:

Quarterly adjusted earnings per diluted share growth

  • Second quarter adjusted earnings per diluted share was $1.85; up 11 percent versus the prior year despite a $0.04 unfavorable foreign currency impact
  • Fourteenth consecutive quarter of double-digit percentage adjusted earnings per diluted share growth
  • On pace to fully realize previously announced restructuring benefits

Moreover although company is huge it manages to grow faster than market in many areas.

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Company is growing not only organically buy also through acquisitions – recently MetoKote Corporation was bought. Around $2.5b should be spent on acquisitions and buybacks (2015-2016 combined). Personally I would prefer higher buyback as dividend yield is quite low.

Current valuation is still high and not attractive for me:

EV/EBITDA = 11

P/E = 17

Dividend yield = 1.5%

 

Summing up, I do not see the story of buying shares now. Valuation is rather high, dividend yield is a little bit too low for me and shares are not far away from all time high level.

 

Disclaimer PPG – no position