Summary
PPG Industries warned investors of rising costs leading to margin pressures.
This ultimately caused the company to reduce earnings guidance.
PPG is a dividend aristocrat that belongs in a well diversified portfolio but only at the right price.
PPG Industries (PPG) recently cited that in the third quarter they continued to see elevating raw material costs and transportation costs. So much so that they reduced estimated earnings guidance by 10% for the upcoming quarter. In addition to elevated costs, the company saw softer demand from China, probably due to its slowing economy and imposed tariffs from both sides. Additionally, the company sees lower end use demand in the auto market leading to less sales of coatings and paints in general. To top it all off, PPG is getting hit with foreign exchange headwinds which further affect earnings.
While the company is currently facing several headwinds, it has been in existence since 1883 and has faced all types of different economic pressures. The company is a dividend aristocrat, and for the long term investor having a staple like PPG in a well balanced portfolio could lead to stable returns. Finding the right entry point is what we will be focusing on today.
