Critical Review: Solstice Advanced Mat (NASDAQ:SOLS) and PPG Industries (NYSE:PPG)

Solstice Advanced Mat (NASDAQ:SOLS) and PPG Industries (NYSE:PPG) are both materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.

Profitability

This table compares Solstice Advanced Mat and PPG Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Solstice Advanced Mat	5.13%	14.28%	4.82%
PPG Industries	9.57%	21.07%	7.80%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Solstice Advanced Mat and PPG Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Solstice Advanced Mat	0	3	7	1	2.82
PPG Industries	0	10	7	0	2.41

Solstice Advanced Mat presently has a consensus price target of $78.25, suggesting a potential upside of 24.90%. PPG Industries has a consensus price target of $126.00, suggesting a potential upside of 10.54%. Given Solstice Advanced Mat’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Solstice Advanced Mat is more favorable than PPG Industries.

Insider & Institutional Ownership

81.9% of PPG Industries shares are held by institutional investors. 0.1% of Solstice Advanced Mat shares are held by company insiders. Comparatively, 0.3% of PPG Industries shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Solstice Advanced Mat and PPG Industries”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Solstice Advanced Mat	$4.10 billion	2.43	$237.00 million	$1.77	35.40
PPG Industries	$16.42 billion	1.54	$1.58 billion	$6.98	16.33

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

Dividends

Solstice Advanced Mat pays an annual dividend of $0.30 per share and has a dividend yield of 0.5%. PPG Industries pays an annual dividend of $2.96 per share and has a dividend yield of 2.6%. Solstice Advanced Mat pays out 16.9% of its earnings in the form of a dividend. PPG Industries pays out 42.4% 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 raised 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 Solstice Advanced Mat on 10 of the 16 factors compared between the two stocks.

About Solstice Advanced Mat

Solstice Advanced Materials is a leading global specialty materials company that advances science for smarter outcomes. Solstice offers high-performance solutions that enable critical industries and applications, including refrigerants, semiconductor manufacturing, data center cooling, nuclear power, protective fibers, healthcare packaging and more.

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.