Reviewing PPG Industries (NYSE:PPG) and Orion (NYSE:OEC)

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

Risk & Volatility

PPG Industries has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Orion has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Insider and Institutional Ownership

81.9% of PPG Industries shares are held by institutional investors. Comparatively, 94.3% of Orion shares are held by institutional investors. 0.3% of PPG Industries shares are held by insiders. Comparatively, 3.1% of Orion shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares PPG Industries and Orion”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PPG Industries	$15.88 billion	1.43	$1.58 billion	$7.01	14.53
Orion	$1.81 billion	0.20	-$70.10 million	($1.60)	-4.02

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for PPG Industries and Orion, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PPG Industries	0	11	5	0	2.31
Orion	3	2	0	0	1.40

PPG Industries presently has a consensus price target of $121.79, suggesting a potential upside of 19.59%. Orion has a consensus price target of $5.92, suggesting a potential downside of 7.98%. Given PPG Industries’ stronger consensus rating and higher probable upside, research analysts plainly believe PPG Industries is more favorable than Orion.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PPG Industries	9.83%	21.68%	7.85%
Orion	-4.98%	2.23%	0.47%

Dividends

PPG Industries pays an annual dividend of $2.84 per share and has a dividend yield of 2.8%. Orion pays an annual dividend of $0.08 per share and has a dividend yield of 1.2%. PPG Industries pays out 40.5% of its earnings in the form of a dividend. Orion pays out -5.0% 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.

Summary

PPG Industries beats Orion on 14 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 Orion

Orion S.A., together with its subsidiaries, engages in the manufacture and sale of carbon black products. It operates in two segments, Specialty Carbon Black and Rubber Carbon Black. The company offers post-treated specialty carbon black grades for coatings and printing applications; high purity carbon black grades for the fiber industry; and conductive carbon black grades for batteries, polymers, and coatings. It also provides rubber carbon black products for applications in mechanical rubber goods, as well as in tires under the ECORAX brand name; and acetylene-based conductive additives for lithium-ion batteries and other applications. It operates in the United States, Brazil, rest of the Americas, Germany, South Africa, Italy, Spain, Turkey, France, Rest of EMEA, China, the Republic of Korea, and rest of Asia. The company was formerly known as Orion Engineered Carbons S.A. and changed its name to Orion S.A. in June 2023. Orion S.A. was founded in 1862 and is headquartered in Senningerberg, Luxembourg.