PPG Industries (PPG) is the global leader in the coatings industry. The company’s two largest competitors are:

Together, the 10 largest coatings companies control over 50% of the industry globally. The coatings industry is quickly consolidating as the largest players acquire smaller players.

This trend has picked up in recent years as low oil and metal prices have reduced input costs for paint, creating higher margins (and more cash flows) for PPG Industries.

PPG Industries was founded in 1883 when Captain John Ford and John Pictairn started Pittsburgh Plate Glass Company. Today, PPG Industries has a market cap of $25.9 billion and has paid increasing dividends for 43 consecutive years.

The company splits its operations into 3 segments. The percentage of total income through the first 6 months of fiscal 2015 for each segment is shown below:

The Glass segment is by far the company’s smallest. It supplies flat glass and continuous strand fiber glass products to its customers.

The Industrial Coatings segment is one of PPG Industries’ two large segments. It provides coatings, finishes, adhesives, and sealants primarily for the industrial, packaging, and automotive industries.

PPG Industries largest segment is its Performance Coatings segment. The segment provides coatings, finishes, adhesives, and sealants for the aerospace, marine, and architectural industries.

Competitive Advantage

With its 4+ decade streak of continuously rising dividends, PPG Industries clearly has a strong and durable competitive advantage.

The paint industry has very favorable economics. It has high margins and requires little capital investment; it generates a lot of cash.