Rpm International Inc/De/ (NYSE: RPM)

Sector: Basic Materials Industry: Specialty Chemicals CIK: 0000110621
Market Cap 14.24 Bn
P/B 4.55
P/E 21.36
P/S 1.88
ROIC (Qtr) 11.04
Div Yield % 1.86
Rev 1y % (Qtr) 3.50
Total Debt (Qtr) 2.87 Bn
Debt/Equity (Qtr) 0.92

About

RPM International Inc. (RPM), a Delaware corporation, operates in the specialty chemical industry, with its stock symbol also being RPM. The company is a leading manufacturer of specialty coatings, sealants, and adhesives, utilized in various industries that include construction, automotive, aerospace, and consumer goods. RPM International Inc.'s main business activities involve the manufacture and sale of specialty coatings, sealants, and adhesives, which cater to a wide range of industries and applications. With a global footprint, the company...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 316.59M provide 38.20x coverage of short-term debt 8.29M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 823.89M provides exceptional 797.57x coverage of minority interest expenses 1.03M, showing strong core operations.
  • Operating cash flow of 823.89M provides strong 29.35x coverage of stock compensation 28.07M, indicating sustainable incentive practices.
  • Robust free cash flow of 582.90M exceeds capital expenditure of 241M by 2.42x, indicating strong organic growth funding capability.
  • Cash position of 316.59M provides exceptional 306.48x coverage of minority interest expenses 1.03M, indicating strong liquidity.

Bear case

  • Operating cash flow of 823.89M barely covers its investment activities of (904.08M), with a coverage ratio of -0.91, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 316.59M against inventory of 1.08B, the 0.29 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 823.89M provides thin coverage of dividend payments of (264.77M) with a -3.11 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 316.59M provide limited coverage of acquisition spending of (667.89M), which is -0.47x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 823.89M is outpaced by equity issuance of (74.70M) (-11.03 ratio), indicating concerning reliance on equity markets for funding operations.

Consolidation Items Breakdown of Revenue (2025)

Peer comparison

Companies in the Specialty Chemicals
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 LIN Linde Plc 218.63 Bn 38.41 6.61 25.93 Bn
2 SHW Sherwin Williams Co 110.34 Bn 170.54 11.54 13.58 Bn
3 ECL Ecolab Inc. 80.35 Bn 80.18 5.93 8.67 Bn
4 APD Air Products & Chemicals, Inc. 56.37 Bn 48.29 5.86 18.31 Bn
5 PPG Ppg Industries Inc 34.00 Bn 31.05 2.58 7.91 Bn
6 LYB LyondellBasell Industries N.V. 17.46 Bn 5.03 0.49 13.22 Bn
7 DD DuPont de Nemours, Inc. 16.63 Bn 3.65 0.32 8.90 Bn
8 ALB Albemarle Corp 14.44 Bn 48.94 6.36 3.63 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.15 1.52
EV to Cash from Ops. EV/CFO 20.58 12.52
EV to Debt EV to Debt 5.91 13.65
EV to EBIT EV/EBIT 18.76 21.45
EV to EBITDA EV/EBITDA 15.77 14.82
EV to Free Cash Flow [EV/FCF] EV/FCF 29.09 29.24
EV to Market Cap EV to Market Cap 1.19 3.84
EV to Revenue EV/Rev 2.24 89.11
Price to Book Value [P/B] P/B 4.55 5.48
Price to Earnings [P/E] P/E 21.36 16.02
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.52 -5.31
Dividend Payout Ratio % Div Payout % (Qtr) 39.70 -75.74
Dividend per Basic Share Div per Share (Qtr) 2.07 1.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 45.15 23.50
Interest Coverage Int. cover (Qtr) 8.50 -8.92
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -6.92 -1.67
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 17.83 72.99
Dividend Growth (1y) % Div 1y % (Qtr) 9.52 -3.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 2.84 -31.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.78 51.49
EBIT Growth (1y) % EBIT 1y % (Qtr) -2.64 0.57
EBT Growth (1y) % EBT 1y % (Qtr) -3.32 -80.35
EPS Growth (1y) % EPS 1y % (Qtr) 2.55 -90.82
FCF Growth (1y) % FCF 1y % (Qtr) -11.23 -50.40
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.75 219.02
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.96 0.70
Cash Payout Ratio Cash Payout (Qtr) 0.25 0.41
Cash Ratio Cash Ratio (Qtr) 0.23 1.28
Current Ratio Curr Ratio (Qtr) 2.22 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 0.92 0.92
Interest Cover Ratio Int Coverage (Qtr) 8.50 -8.92
Times Interest Earned Times Interest Earned (Qtr) 8.50 -8.92
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 14.60 -333.97
EBIT Margin % EBIT Margin % (Qtr) 11.92 -374.34
EBT Margin % EBT Margin % (Qtr) 10.52 -379.75
Gross Margin % Gross Margin % (Qtr) 41.20 29.26
Net Profit Margin % Net Margin % (Qtr) 8.80 -380.67