NYSE:RPM

Stock Analysis Report

Executive Summary

RPM International Inc. manufactures and sells specialty chemicals for the industrial, specialty, and consumer markets worldwide.

Rewards

Trading at 17% below its fair value

Earnings are forecast to grow 19.34% per year

Earnings grew by 35.5% over the past year

Pays a high and reliable dividend of 1.95%

Risk Analysis

Debt is not well covered by operating cash flow



Snowflake Analysis

Solid track record established dividend payer.


Similar Companies

Axalta Coating Systems

NYSE:AXTA

Share Price & News

How has RPM International's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RPM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.9%

RPM

-1.5%

US Chemicals

-0.09%

US Market


1 Year Return

33.7%

RPM

-0.7%

US Chemicals

23.9%

US Market

Return vs Industry: RPM exceeded the US Chemicals industry which returned 1.6% over the past year.

Return vs Market: RPM exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

RPMIndustryMarket
7 Day-0.9%-1.5%-0.09%
30 Day-1.8%-2.0%3.1%
90 Day4.2%3.1%10.4%
1 Year36.6%33.7%15.0%-0.7%26.6%23.9%
3 Year48.9%38.9%29.3%4.7%50.9%41.2%
5 Year74.4%55.3%49.3%17.1%78.1%58.5%

Price Volatility Vs. Market

How volatile is RPM International's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is RPM International undervalued compared to its fair value and its price relative to the market?

16.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RPM ($73.75) is trading below our estimate of fair value ($88.88)

Significantly Below Fair Value: RPM is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: RPM is poor value based on its PE Ratio (28.9x) compared to the Chemicals industry average (20.8x).

PE vs Market: RPM is poor value based on its PE Ratio (28.9x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: RPM is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: RPM is overvalued based on its PB Ratio (6.8x) compared to the US Chemicals industry average (2.2x).


Next Steps

Future Growth

How is RPM International forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

19.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RPM's forecast earnings growth (19.3% per year) is above the savings rate (1.7%).

Earnings vs Market: RPM's earnings (19.3% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: RPM's earnings are forecast to grow, but not significantly.

Revenue vs Market: RPM's revenue (3.5% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: RPM's revenue (3.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RPM's Return on Equity is forecast to be high in 3 years time (34.7%)


Next Steps

Past Performance

How has RPM International performed over the past 5 years?

2.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RPM has high quality earnings.

Growing Profit Margin: RPM's current net profit margins (5.9%) are higher than last year (4.4%).


Past Earnings Growth Analysis

Earnings Trend: RPM's earnings have grown by 2.5% per year over the past 5 years.

Accelerating Growth: RPM's earnings growth over the past year (35.5%) exceeds its 5-year average (2.5% per year).

Earnings vs Industry: RPM earnings growth over the past year (35.5%) exceeded the Chemicals industry -17%.


Return on Equity

High ROE: Whilst RPM's Return on Equity (23.67%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is RPM International's financial position?


Financial Position Analysis

Short Term Liabilities: RPM's short term assets ($2.4B) exceed its short term liabilities ($984.1M).

Long Term Liabilities: RPM's short term assets ($2.4B) do not cover its long term liabilities ($3.2B).


Debt to Equity History and Analysis

Debt Level: RPM's debt to equity ratio (179.8%) is considered high.

Reducing Debt: RPM's debt to equity ratio has increased from 90.4% to 179.8% over the past 5 years.

Debt Coverage: RPM's debt is not well covered by operating cash flow (17.6%).

Interest Coverage: RPM's interest payments on its debt are well covered by EBIT (6x coverage).


Balance Sheet

Inventory Level: RPM has a high level of physical assets or inventory.

Debt Coverage by Assets: RPM's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is RPM International's current dividend yield, its reliability and sustainability?

1.94%

Current Dividend Yield


Dividend Yield vs Market

company1.9%marketbottom25%1.4%markettop25%3.7%industryaverage2.2%forecastin3Years2.0%

Current dividend yield vs market & industry

Notable Dividend: RPM's dividend (1.95%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: RPM's dividend (1.95%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: RPM's dividends per share have been stable in the past 10 years.

Growing Dividend: RPM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55.3%), RPM's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RPM's dividends in 3 years are forecast to be well covered by earnings (31% payout ratio).


Next Steps

Management

What is the CEO of RPM International's salary, the management and board of directors tenure and is there insider trading?

10.0yrs

Average management tenure


CEO

Frank Sullivan (58yo)

17.3yrs

Tenure

US$8,397,565

Compensation

Mr. Frank C. Sullivan has been the Chief Executive Officer and President of RPM International Inc. since October 11, 2002 and August 1999 respectively. He served as Chief Operating Officer of RPM Internati ...


CEO Compensation Analysis

Compensation vs Market: Frank's total compensation ($USD8.40M) is about average for companies of similar size in the US market ($USD10.73M).

Compensation vs Earnings: Frank's compensation has increased by more than 20% in the past year.


Management Age and Tenure

10.0yrs

Average Tenure

55yo

Average Age

Experienced Management: RPM's management team is seasoned and experienced (10 years average tenure).


Board Age and Tenure

7.8yrs

Average Tenure

64.5yo

Average Age

Experienced Board: RPM's board of directors are considered experienced (9.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$834,06022 Oct 19
David Daberko
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares12,000
Max PriceUS$69.51
SellUS$73,19426 Jul 19
Frederick Nance
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,100
Max PriceUS$66.54

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Frank Sullivan (58yo)

    Chairman

    • Tenure: 17.3yrs
    • Compensation: US$8.40m
  • Keith Smiley (57yo)

    VP of Finance & Controller

    • Tenure: 7.8yrs
    • Compensation: US$1.18m
  • Thomas Sullivan (55yo)

    Vice President of Corporate Development

    • Tenure: 12.3yrs
  • Lonny DiRusso (54yo)

    VP & Chief Information Officer

    • Tenure: 1.3yrs
  • Michael Matchinga

    Director of Human Resource Information Systems

    • Edward Moore (62yo)

      Senior VP

      • Tenure: 13yrs
      • Compensation: US$2.06m
    • Janeen Kastner (52yo)

      Vice President of Corporate Benefits & Risk Management

      • Tenure: 12.3yrs
      • Compensation: US$1.92m
    • Russell Gordon (53yo)

      VP & CFO

      • Tenure: 7.8yrs
      • Compensation: US$2.39m
    • Kathie Rogers

      Manager of Investor Relations

      • Michael Sullivan

        VP of Operations & Chief Restructuring Officer

        • Tenure: 0.6yrs

      Board Members

      • Bruce Carbonari (63yo)

        Lead Director

        • Compensation: US$218.90k
      • David Daberko (74yo)

        Independent Director

        • Tenure: 12.3yrs
        • Compensation: US$216.40k
      • Tom Gross (64yo)

        Independent Director

        • Tenure: 7.8yrs
        • Compensation: US$198.90k
      • Sal Fazzolari (66yo)

        Independent Director

        • Tenure: 7yrs
        • Compensation: US$221.40k
      • Frank Sullivan (58yo)

        Chairman

        • Tenure: 17.3yrs
        • Compensation: US$8.40m
      • William Summers (68yo)

        Independent Director

        • Tenure: 15.5yrs
        • Compensation: US$198.90k
      • Fred Nance (65yo)

        Independent Director

        • Tenure: 13yrs
        • Compensation: US$198.90k
      • Bob Livingston (65yo)

        Independent Director

        • Tenure: 2.3yrs
        • Compensation: US$213.90k
      • Jenniffer Deckard (53yo)

        Independent Director

        • Tenure: 4.3yrs
        • Compensation: US$198.90k
      • Julie Lagacy (52yo)

        Independent Director

        • Tenure: 2.5yrs
        • Compensation: US$198.90k

      Company Information

      RPM International Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: RPM International Inc.
      • Ticker: RPM
      • Exchange: NYSE
      • Founded: 1947
      • Industry: Specialty Chemicals
      • Sector: Materials
      • Market Cap: US$9.609b
      • Shares outstanding: 129.77m
      • Website: https://www.rpminc.com

      Number of Employees


      Location

      • RPM International Inc.
      • 2628 Pearl Road
      • PO Box 777
      • Medina
      • Ohio
      • 44258
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      RPMNYSE (New York Stock Exchange)YesCommon StockUSUSDDec 1972
      RP8DB (Deutsche Boerse AG)YesCommon StockDEEURDec 1972

      Biography

      RPM International Inc. manufactures and sells specialty chemicals for the industrial, specialty, and consumer markets worldwide. Its Industrial segment offers waterproofing, coatings, and institutional roofing systems; sealants, air barriers, tapes, and foams; residential home weatherization systems; roofing and building maintenance and related services; sealing and bonding, and flooring and in-plant glazing solutions; solutions for fire stopping and intumescent steel coating, and the manufacturing industry; polymer flooring systems; and fiberglass reinforced plastic gratings and shapes. It also offers corrosion-control coating, containment lining, fire and sound proofing, and insulation products; rolled asphalt roofing materials and chemical admixtures; concrete and masonry admixtures, concrete fibers, curing and sealing compounds, structural grouts and mortars, epoxy adhesives, injection resins, polyurethane foams, floor hardeners and toppings, joint fillers, industrial and architectural coatings, decorative color/stains/stamps, and restoration materials; specialty construction products; and amine curing agents, reactive diluents, specialty epoxy resins and other intermediates. The company’s Specialty segment provides fluorescent colorants and pigments; shellac-based-specialty and marine coatings; insulated building cladding materials; fire and water damage restoration, and carpet cleaning and disinfecting products; fuel additives; and wood treatments, furniture finishes, and touch-up products. Its Consumer segment offers specialty products for paint contractors and the DIYers, deck and fence restoration products, metallic and faux finish coatings, exterior wood deck and concrete restoration systems, flooring finishes, and hobby paints and cements; caulk, sealant, adhesive, insulating foam, spackling, glazing, and patch and repair products; and nail enamels, polishes, and coating components. The company was founded in 1947 and is headquartered in Medina, Ohio. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/23 23:58
      End of Day Share Price2020/01/23 00:00
      Earnings2019/11/30
      Annual Earnings2019/05/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.