Should PPG Stock Holders Look At Albemarle Instead?
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Selling prices shaped the latest quarter at both PPG Industries (PPG) and Albemarle. The latest price increases at PPG covered its higher costs. Albemarle reported a year-over-year rise in September-quarter sales, mainly on higher lithium prices and on higher prices and volumes in its specialties business. Albemarle’s sales grew 24.4% over the latest twelve months, against 6.4% for PPG. For a PPG holder thinking of switching, that growth matters only if Albemarle’s profit and cash hold up now that lithium prices have started to fall. How has Albemarle’s profit held up so far?
Albemarle’s Margin Fell While PPG Lifted Earnings Guidance
Albemarle has already seen its profit fall sharply from its June-quarter level. The company recorded an operating margin of 10.1% in the September quarter, down from 26.4% in June. That is still far better than a year earlier, when Albemarle lost money on its operations.
If today’s lower market prices persist, management expects sales and adjusted EBITDA in its lithium business to fall in the December quarter from the September quarter.
PPG went the other way. The company raised its full-year 2026 adjusted earnings per share forecast on October 27 to a midpoint of $8.00, up from $7.90 in July. Management tied the raise to its growth momentum and its productivity programs. Albemarle, by contrast, tied its lithium outlook to the market price. It did raise its full-year specialties adjusted EBITDA outlook to $350 million to $375 million.
Albemarle’s Cash Against Its Debt And PPG’s Price Catch-Up
Albemarle’s cash still keeps pace with its debt. The company held $1.85 billion in cash and short-term investments at the end of September against $1.88 billion of debt. Management also lowered its 2026 capital spending plan to a range of $300 million to $350 million, down from about $500 million. Less cash came into Albemarle during the September quarter than in June, however.
PPG carries the heavier debt. The company owed $7.46 billion at the end of September against $1.64 billion of cash, and it is spending more than $500 million to expand capacity in its aerospace business.
PPG has seen its prices catch up with its costs across every segment except industrial coatings, where contracts follow price indexes with a delay. Management expects most of that catch-up to occur in the first half of 2027.
PPG’s Steadier Record Against Albemarle’s Twelve-Month Margin
PPG is the steadier business. PPG’s operating margin averaged 14.2% across its last three twelve-month periods, while Albemarle averaged an operating loss.
Albemarle earned the wider operating margin over the latest twelve months alone, posting 16.3% against 13.5% for PPG. In the September quarter, though, PPG recorded the wider operating margin of the two at 14.9%.
The two stocks cost about the same on an earnings basis, trading at 17.0 times for Albemarle and 17.4 times for PPG. The twelve months behind Albemarle’s P/E are uneven, however: its September-quarter profit of $297 million came on $156 million of operating income, while its December 2025 quarter posted a $414 million loss. Albemarle is clearly cheaper on cash from operations, trading at 6.3 times against 13.4 times for PPG.
Where PPG And Albemarle Each Come Out Ahead
Albemarle comes out ahead over the latest twelve months with faster sales growth, a wider operating margin, less debt against its market value and a cheaper price on its operating cash flow. PPG comes out ahead on the latest quarter’s margin, a steadier record and the direction of its forecast. For a holder who wants recent growth and a light balance sheet, Albemarle’s twelve-month figures are stronger; for one who wants steady margins, PPG’s are.
For a PPG holder, Albemarle’s cash roughly matches its debt, yet both its profit and incoming cash have fallen sharply since June. Albemarle’s operating margin in its December-quarter results, expected in February 2027, is the figure to watch.
Picking between two stocks is the small call. The big one: how to invest for a crash and a rally.
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