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RPM International’s Performance Compared to Its Peers

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RPM International and its peers

An analysis of RPM’s income statement in 1Q16 follows:

  • The gross profit margins of RPM International (RPM), The Valspar Corp (VAL), PPG Industries (PPG), Sherwin-Williams (SHW), and Owens Corning (OC) are 42.9%, 36.2%, 44.3%, 48.9%, and 21.8%, respectively.
  • The EPS (earnings per share) of RPM, Valspar, PPG, Sherwin-Williams, and Owens Corning are $0.74, $1.25, $1.23, $3.70, and $0.77, respectively.

An analysis of RPM’s balance sheet in 1Q16 follows:

  • The current ratios of RPM, Valspar, PPG, Sherwin-Williams, and Owens Corning are 2.6, 1.2, 1.5, 0.90, and 2.1, respectively.

An analysis of RPM’s valuation follows:

  • The PE (price-to-earnings) ratios of RPM, Valspar, PPG, Sherwin-Williams, and Owens Corning are 25.4x, 15.8x, 23.3x, 24.x, and 26.1x, respectively.
  • The PBV (price-to-book value) ratios of RPM, Valspar, PPG, and Owens Corning are 4.4x, 6.9x, 5x, and 1.4x, respectively.

According to the above findings, the peers outperformed RPM International based on EPS and the PBV ratio. However, RPM International is way ahead of its peers based on the current ratio and PE ratio.

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ETFs that invest in RPM International

The PowerShares DWA Basic Materials Momentum Portfolio (PYZ) invests 1.9% of its holdings in RPM. PYZ tracks an index of US basic materials firms that are selected and weighted by price momentum.

The iShares Dow Jones US Basic Materials Sector ETF (IYM) invests 1.1% of its holdings in RPM. IYM tracks a broad, market-cap-weighted index of US basic materials companies that include coal companies.

The SPDR S&P Dividend ETF (SDY) invests 1% of its holdings in RPM. SDY tracks a yield-weighted index of 50 dividend-paying companies from the S&P 1500 Composite Index that have increased dividends for at least 20 consecutive years.

Compared RPM and its ETFs

An analysis of RPM’s price movement follows:

  • The YTD (year-to-date) price movements of RPM, PYZ, IYM, and SDY are -12.4%, -7.9%, -14.1%, and -4.3%, respectively.

An analysis of RPM’s valuation follows:

  • The PE ratios of RPM, PYZ, IYM, and SDY are 25.4x, 18.8x, 36x, and 20.3x, respectively.
  • The PBV ratios of RPM, PYZ, IYM, and SDY are 4.4x, 2.8x, 2.5x, and 2.5%, respectively.

According to the above findings, the ETFs outperformed RPM International based on the price movement. However, RPM International is way ahead of its ETFs based on the PE ratio and PBV ratio.

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