Smart Dividend Portfolio Edition #87: Polished Payouts
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Dear Investor,
Welcome to the 87th edition of TipRanks’ Smart Dividend Portfolio & Newsletter.
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Market-Moving News: Nov 17, 2025
Last week, stocks finished with a mixed performance as investors weighed fresh inflation data and renewed concern about the cost of the AI buildout. The Nasdaq 100 (NDX) rose 0.06%, while the S&P 500 (SPX) slipped 0.05%, and the Dow Jones Industrial Average (DJIA) fell 0.65%. The Russell 2000 (IWM) gained 0.22% as small-cap stocks bounced up from recent lows.
Energy led all sectors with a 1.7% gain, while Financials lagged with a 1% decline. Crude oil rose 2.3% to $59.95 a barrel, and gold dropped 2.16% to $4,084 per ounce. Bitcoin fell 5.13% to $94,504, marking its lowest level since May.
Federal Reserve officials maintained a careful tone on rates. Kansas City Fed President Jeff Schmid said inflation “remains too high,” while Boston Fed President Susan Collins noted that another rate cut soon is unlikely. Traders now see only a 50% chance of a December rate cut, down from full expectations three weeks ago.
Meanwhile, bond yields ticked higher as the 10-year Treasury reached 4.148%. The U.S. Dollar Index held steady at 99.27. With valuations near record highs, many investors appear to be focused on holding onto gains as the year draws to a close.
The focus this week remained on AI and the substantial amount of money being poured into it. Investors are starting to wonder if the spending spree can truly pay off.
The largest technology firms are investing record sums in AI hardware and data centers. Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), and Meta Platforms (META) together spent almost $100 billion last quarter on property and equipment. That is far above Apple’s (AAPL) $3 billion.
However, this massive investment is running into physical and financial limits. Industry data show a shortage of transformers, gas turbines, and even land for new data centers. GE Vernova’s (GEV) CEO said nearly all the firm’s power equipment is already booked through 2028. Goldman Sachs (GS) and JPMorgan (JPM) analysts estimate that the total cost of building AI infrastructure could reach $5 trillion by 2030.
According to JPMorgan’s model, AI companies will need to generate about $650 billion in new yearly revenue to justify that investment. That is more than one and a half times Apple’s current annual sales. For now, the numbers look bold, but investors are starting to question how quickly the payoff will arrive. Even with big promises for smarter assistants and new AI tools, it is still unclear who will foot the bill for all this growth.
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This Week’s Quality Dividend Stock Idea
PPG Industries (PPG) is a global coatings and specialty materials company that develops and manufactures products used across industrial, automotive, aerospace, construction, and consumer markets. Through its Global Architectural Coatings, Performance Coatings, and Industrial Coatings segments, the company supplies technologies that enhance durability, appearance, and surface protection for customers worldwide. Headquartered in Pittsburgh, PPG is one of the world’s largest coatings manufacturers and a long-established leader in advanced materials and color technologies.
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Transformative Coat
PPG Industries traces its origins to 1883, when Captain John Pitcairn and John B. Ford founded the Pittsburgh Plate Glass Company in Pennsylvania. The company pioneered high-quality, affordable plate glass manufacturing in the United States, and its early success laid the foundation for expansion into coatings and chemicals in the early 1900s. As industrial and automotive markets grew, PPG developed protective and decorative coatings alongside innovations in synthetic resins and pigments, gradually shifting from a glassmaker into a diversified materials company.
By the second half of the 20th century, coatings had become PPG’s primary growth driver. From the 1960s through the 1980s, the company exited low-margin operations, increased R&D investment, and established itself as a leader in specialty coatings and materials. This strategic transformation accelerated in the 2000s through a series of portfolio reshaping decisions. The 2008 acquisition of SigmaKalon significantly expanded PPG’s presence in Europe and emerging markets, while the divestiture of its commodity chemicals business in 2013 marked its transition into a pure-play coatings and specialty materials company.
Over the past decade, PPG has continued expanding its portfolio and global reach through targeted acquisitions while divesting lower-margin assets. In 2011, the company acquired major portions of ICI plc’s automotive-refinish and industrial coatings businesses, including aerospace coatings from PRC-DeSoto, strengthening its position in the automotive and aerospace markets. Its 2014 acquisition of Comex expanded PPG’s footprint across Latin America, and the 2015 purchase of Revocoat bolstered its global sealants and automotive-coatings capabilities.
Momentum continued in 2021 with several strategic acquisitions. The purchase of Tikkurila, a major Nordic decorative paints manufacturer, extended PPG’s geographical presence and broadened its decorative-coatings portfolio. That same year, the additions of VersaFlex, Cetelon, Wörwag, and Arsonsisi’s Italian powder-coatings operations enhanced its high-performance coatings technology and EMEA reach. These moves underscored PPG’s ongoing focus on innovation, sustainability, and advanced materials.
Alongside expansion, PPG actively streamlined its portfolio to improve profitability and emphasize higher-margin businesses. In 2016, it sold its flat glass business to Vitro, followed in 2017 by the divestiture of its fiberglass operations to Nippon Electric Glass. The realignment continued in 2024, when PPG sold its silicas products business to Qemetica and divested its U.S. and Canada architectural coatings operations—including the Glidden and Dulux (Canada) brands—to American Industrial Partners. This transaction included 750 retail stores and distribution facilities, marking a significant shift toward industrial and specialty coatings. This year, PPG further optimized its global footprint through the completion of the sale of its remaining Russian operations.
These acquisitions and divestitures have strengthened PPG’s operating efficiency, expanded its technological capabilities, and enhanced capital flexibility. Today, the company operates in more than 70 countries and stands as one of the world’s largest coatings manufacturers. This transformation from a regional glass producer into a global, technology-driven coatings leader reflects more than a century of disciplined strategy, portfolio evolution, and innovation.
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Diversified Finish
PPG Industries operates a diversified, customer-driven business model built around the development and sale of coatings and specialty materials that serve a broad range of end markets. The company generates revenue primarily by supplying high-performance coatings, adhesives, sealants, and related technologies through three core segments – Global Architectural Coatings, Performance Coatings, and Industrial Coatings, which together accounted for all continuing operations sales in the latest quarter.
The Performance Coatings segment serves customers in refinish, aerospace, protective, and packaging coatings, as well as architectural coatings outside North America. These coatings are used on vehicles, aircraft, ships, and infrastructure, where durability, color consistency, and environmental performance are key. In the third quarter of 2025, this segment contributed around 35% to sales, with strong demand in automotive refinish, aerospace, and industrial maintenance coatings. Its resilience is supported by long-term contracts with OEMs and aftermarkets, which help stabilize revenue and mitigate economic cyclicality.
The Industrial Coatings segment supplies coatings to original equipment manufacturers in the automotive, industrial, and consumer goods sectors, and it accounted for about 41% of PPG’s sales in the third quarter. Its products are applied to cars, appliances, construction equipment, and packaging materials. The segment benefits from PPG’s deep integration into customer production processes and its ability to deliver value through customized, high-performance coatings that improve efficiency and reduce emissions. PPG’s focus on innovation, particularly in powder coatings, e-mobility coatings, and low-Volatile Organic Compound (VOC) formulations, positions it to capture growth from increasing regulatory standards and sustainability trends.
The company’s Global Architectural Coatings business is a major segment of its operations outside the United States and Canada, and contributed around 25% to sales. This segment focuses on the development, manufacturing, and distribution of paints, stains, coatings, and related products for residential, commercial, and industrial building applications worldwide.
PPG’s earnings growth is supported by a combination of scale, technology leadership, and disciplined portfolio management. Recent restructuring actions, operational efficiencies, and raw material cost management have improved margins and free cash flow generation.
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Primed Rebound
PPG’s automotive refinish business is moving through a temporary downturn, driven by cyclical rather than structural factors, and management expects conditions to normalize over the next year. The slowdown is most pronounced in the United States, where distributors placed unusually large orders in the first half of 2025. That early stocking led to a mid-to-high-teens year-over-year decline in the second half as distributors used up excess inventory. At the same time, collision-repair activity softened because insurance claims declined across the industry. After U.S. auto insurance premiums rose at a 16% compound annual rate from 2022 to 2024, insurers tightened claims processing in 2025, resulting in low-single-digit declines in repairable accidents. Fewer claims directly translate into lower demand for refinish materials, adding to the volume pressure.
Management expects accident-claim activity to begin normalizing by mid-2026, consistent with past patterns that follow periods of sharp insurance-rate inflation. As demand stabilizes, PPG is well-positioned to outpace industry growth. The company continues to gain market share through technologies that improve body-shop productivity, including its LINQ workflow platform, more than 3,000 MoonWalk automated mixing systems, and new AI-designed coatings such as the latest DELTRON clearcoat. These tools help repair centers reduce labor time and material waste – especially important advantages during a soft market. The company is also in active discussions with large potential customers, suggesting that its competitive momentum remains intact despite near-term weakness. The refinish slowdown weighed on fourth-quarter guidance, but management views this period as transitional and ultimately supportive of the company’s longer-term positioning.
The broader macro backdrop remains uneven. Industrial demand is stabilizing more slowly than expected, with more meaningful improvement now anticipated around mid-2026. Even so, the company expects new business wins, cost-reduction initiatives, and a favorable raw-material environment to help offset these headwinds.
Beyond the refinish cycle, PPG’s long-term growth outlook is supported by strong demand across several core markets. Aerospace remains one of the largest contributors, with aircraft production ramping globally and the company delivering double-digit growth. Higher-margin products such as sealants, transparencies, and advanced coatings continue to expand the company’s dollar value of its materials and technologies used on each aircraft every year by more than 1–2%. PPG is investing more than $500 million – including a major new facility scheduled for 2027 – to expand capacity and relieve bottlenecks, supporting a multi-year runway for mid- to high-single-digit growth.
Protective and marine coatings offer another long-term opportunity. The marine aftermarket is recovering, and global energy infrastructure spending is driving strong demand for protective coatings. Incremental investments in these businesses support sustained double-digit growth.
In the industrial and automotive OEM segment, PPG continues to outperform global auto production, growing roughly twice as fast as the industry. More than $100 million in previously won contracts are now showing results, and new business wins continue to build the pipeline. Growth in China remains positive, and management does not expect near-term pricing pressure to materially affect performance.
While Performance Coating margins have been pressured by refinish mix shifts and ongoing investments, the company continues to offset these pressures with disciplined pricing and productivity actions. Inflation remains manageable, with raw material costs expected to rise only in the low-single-digit range. The company is using pre-buying, supplier volume agreements, and long-term contracting to mitigate tariff-driven and epoxy-related cost increases, and these effects are already incorporated into its guidance.
Capital spending is expected to peak in 2025 at approximately 3.5% of sales due to aerospace expansion projects but will decline to about 3% by 2027 as these temporary investments taper. This trajectory shows that the near-term spike is transitory, allowing PPG to maintain financial discipline while supporting growth across its highest-value businesses.
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Polished Performance
PPG Industries has delivered steady financial performance in recent years, supported by disciplined portfolio management and consistent execution despite a challenging macroeconomic backdrop. Over the past five years, the company’s revenue has grown at a modest 2.7% CAGR, reflecting strong pricing actions and selective acquisitions. However, EPS has contracted by about 1% over the same period, as higher input costs, currency pressures, restructuring expenses, and a shifting business mix have weighed temporarily on margins and profitability.
In the most recent quarter, PPG reported a record adjusted EPS of $2.13, a 5% increase year over year and ahead of expectations. Net sales rose 1% to $4.08 billion, with organic sales up 2% driven by stronger pricing and volume gains. Net income remained steady at $444 million, while adjusted net income inched up to $481 million. Profitability held firm across the portfolio, with EBITDA margin near 20%, supported by growth in aerospace, protective, and marine coatings, and packaging coatings. These gains were partially offset by softer demand in automotive refinish coatings.
Industrial Coatings led the quarter’s profitability improvement, with segment income rising 17% to $233 million and EBITDA margin reaching 17%, propelled by higher sales volumes and productivity benefits. Performance Coatings generated $1.41 billion in sales, up 3% year over year, though segment income declined to $272 million due to weaker refinish volumes and increased investment spending. Global Architectural Coatings delivered $1.01 billion in sales and maintained stable margins of 18.2%, helped by pricing actions and favorable currency impacts that offset the effects of recent divestitures.
Looking ahead, PPG expects to close 2025 with steady earnings despite ongoing macroeconomic headwinds and modest raw-material inflation. For the fourth quarter, the company anticipates flat-to-low single-digit organic sales growth across most end markets. Global Architectural Coatings and Industrial Coatings are both expected to deliver flat to slightly positive results, while Performance Coatings is projected to range from a low single-digit decline to flat growth. Segment EBITDA margins are expected to contract 30 to 50 basis points year over year due to slightly higher input and investment costs.
For FY25, PPG forecasts adjusted EPS of $7.65 at the midpoint, supported by modest organic growth and ongoing cost discipline. Industrial Coatings is expected to post low- to mid-single-digit growth and offset flat to slightly lower results in Performance Coatings, while Global Architectural Coatings should grow in the low single digits. Segment EBITDA margins are projected to tighten by 50 to 70 basis points, reflecting lingering cost pressures. As part of its efficiency initiatives, PPG aims to realize roughly $60 million in restructuring savings, net of stranded costs.
The company’s balance sheet remains solid. PPG ended the quarter with $1.9 billion in cash and short-term investments and net debt of $5.4 billion. Operating cash flow reached $1.05 billion for the first nine months of 2025, roughly in line with last year, demonstrating consistent cash conversion. Capital expenditures totaled $477 million, reflecting ongoing investments in high-growth areas. With a last-twelve-month net debt-to-adjusted EBITDA ratio of 2.0x – below the industry median of 2.25x – and a “BBB+” credit rating from Fitch, PPG maintains a stable financial foundation to support long-term growth.
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Shiny Returns
PPG has built one of the most dependable income track records in the market. The company has paid an annual dividend every year since 1899, earning its place among the Dividend Kings, and has even increased its dividend for more than 50 consecutive years. This consistency reflects the durability of PPG’s business model and its long-standing commitment to returning capital to shareholders. The most recent quarterly dividend of $0.71 per share translates to an annualized payout of roughly $2.84. Based on current trading levels, this implies a forward yield of 2.9%, comfortably above the Basic Materials sector average of 1.71%.
Shareholder returns are further supported by steady share repurchases. Year to date, PPG has deployed $1.2 billion toward dividends and buybacks, including approximately $150 million in repurchases and $160 million in dividends in the third quarter alone.
Despite these strengths, PPG’s stock has fallen about 21% over the past year. The decline reflects several pressures: softer global economic conditions affecting industrial and automotive markets, the impact of recent divestitures, currency headwinds, and uncertainty surrounding the pace of demand recovery, particularly in Europe.
PPG Industries’ shares appear undervalued relative to both historical averages and industry peers. The stock currently trades at more than a 22% discount to its historical averages based on non-GAAP trailing and forward P/E ratios, forward EV/EBITDA, and price-to-book and price-to-cash flow multiples. Compared to competitors such as Sherwin-Williams and RPM International, PPG trades in the lower valuation range based on non-GAAP trailing and forward P/E ratios and forward EV/EBITDA, suggesting the market may be underpricing its earnings power and strong cash generation. For investors, this discount suggests potential upside as PPG’s efficiency gains, margin improvements, and share repurchases support earnings growth. As fundamentals strengthen, the valuation gap with peers could narrow, offering an appealing entry point.
Analyst sentiment remains constructive as strong momentum in aerospace and marine coatings, combined with efforts to streamline operations and leverage AI-driven product development, underpins its competitive position and long-term revenue stability.
Consensus estimates point to roughly 23% upside from current levels, with some forecasts reaching as high as 36%. A discounted cash flow analysis adds further support, indicating the stock may be trading about 39% below its intrinsic value.
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Investing Takeaway
PPG offers a compelling income profile supported by one of the longest dividend histories in the market and a demonstrated commitment to returning cash to shareholders. Its ability to maintain and steadily grow its payout through shifting economic cycles reflects the strength of its diversified coatings portfolio, consistent cash generation, and disciplined financial management. Share repurchases further reinforce total shareholder returns, signaling management’s confidence in the company’s long-term earnings power. With the stock trading below historical valuation levels, income-focused investors gain access to a high-quality industrial business with a proven record of stability. As operational efficiencies and end-market recovery support future profit growth, PPG appears well positioned to sustain and potentially enhance its long-term income appeal.
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Dividend Investor Portfolio
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Portfolio News
▣ ADP (ADP) approved a $0.16 increase in its quarterly cash dividend, raising the annual dividend rate to $6.80 per share. The increase extends ADP’s exceptional track record of dividend growth, marking the 51st consecutive year in which the company has raised its quarterly payout. The newly authorized quarterly dividend is scheduled to be paid on January 1, 2026, to shareholders of record as of December 12, 2025.
▣ BlackRock (BLK) through its Global Infrastructure Partners (GIP) unit, has partnered with ACS Group to create a 50-50 joint venture focused on developing and operating next-generation data centers globally. The collaboration aims to provide end-to-end, scalable solutions for hyperscalers, AI companies, and enterprises seeking rapid, sustainable data center deployment.
The new platform will integrate ACS’s industrial expertise and advanced technology capabilities with GIP’s investment leadership. At launch, the venture will include ACS’s existing 1.7 GW portfolio of data center assets under development across Europe, the United States, and Australia. The portfolio is valued at approximately $2.3 billion, comprising an upfront cash payment of around $1.16 billion and initial earn-outs of up to $1.2 billion, contingent on meeting predefined commercial milestones. An additional earn-out of up to $232 million could be realized from other pipeline projects currently under evaluation.
Beyond the contributed assets, ACS is reviewing potential projects totaling more than 11 GW across North America, Europe, and the Asia-Pacific region, indicating significant growth potential for the new data center platform.
▣ Verizon (VZ) is planning to reduce its workforce by approximately 15,000 employees as part of a cost-cutting initiative, according to a Wall Street Journal report. The layoffs are expected to occur during the next week, with most of the job reductions implemented directly through workforce cuts.
In addition to the personnel reductions, Verizon intends to convert around 200 of its company-owned retail stores into franchised operations. The moves come as the telecommunications giant faces intensified competition in both wireless services and home internet markets, prompting efforts to streamline operations and improve efficiency.
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Recent Trades
None at the moment, although we are considering adding a stock to our portfolio when the market conditions allow for an attractive entry point. Stay tuned.
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Portfolio Attributes
| Dividend Portfolio Yield |
Expected Dividend Growth | Expected Annual Income |
| 3.98% | +5.94% | $5,929.82 |
| Yield-on-Cost Adjusted, Weighted |
Average Analyst 12-Month Growth Outlook | 10K Per Stock at the Time of Purchase |
Current Portfolio
| Name | EX-Dividend Date | Payment Date | Yield on Cost | Annual DPS |
| Automatic Data Processing (ADP) | Dec 12, 2025 | Jan 01, 2026 | 2.46% | $6.80 |
| Amgen (AMGN) | Nov 21, 2025 | Dec 12, 2025 | 3.27% | $9.52 |
| BlackRock (BLK) | Dec 04, 2025 | Dec 23, 2025 | 2.61% | $20.84 |
| Bank of Nova Scotia (BNS) | Jan 07, 2026 | Jan 29, 2026 | 5.98% | $3.21 |
| EOG Resources (EOG) | Jan 16, 2026 | Jan 30, 2026 | 3.06% | $4.08 |
| ExxonMobil (XOM) | Feb 12, 2026 | Mar 10, 2026 | 3.64% | $4.12 |
| IBM (IBM) | Feb 10, 2026 | Mar 10, 2026 | 3.14% | $6.72 |
| JPMorgan Chase (JPM) | Jan 06, 2026 | Jan 29, 2026 | 3.43% | $6.00 |
| Kroger (KR) | Feb 17, 2026 | Mar 03, 2026 | 3.08% | $1.40 |
| Lockheed Martin (LMT) | Dec 02, 2025 | Dec 29, 2025 | 2.85% | $13.80 |
| PepsiCo (PEP) | Dec 09, 2025 | Jan 06, 2026 | 3.8% | $5.69 |
| Philip Morris (PM) | Dec 26, 2025 | Jan 13, 2026 | 6.06% | $5.88 |
| Qualcomm (QCOM) | Dec 08, 2025 | Dec 22, 2025 | 2.36% | $3.56 |
| VICI Properties (VICI) | Dec 17, 2025 | Jan 09, 2026 | 5.22% | $1.8 |
| Verizon (VZ) | Jan 12, 2026 | Feb 03, 2026 | 6.09% | $2.76 |
NameEX-Dividend DatePayment DateYield on Cost Annual DPS
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Click here for more stock market analysis from TipRanks Macro & Markets research analyst Yulia Vaiman
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Disclaimer
The information contained in this article represents the views and opinions of the writer only, and not the views or opinions of TipRanks or its affiliates and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy, or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment, and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices, or performance.
