Stock Analysis & Valuation RPM International Inc. (RPM)

• Previous Close: $106.96
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	99.71	-7
Intrinsic value (DCF)	47.63	-55
Graham-Dodd Method	6.88	-94
Graham Formula	46.99	-56

Strategic Investment Analysis

Company Overview

RPM International Inc. (NYSE: RPM) is a global leader in specialty chemicals, serving industrial, specialty, and consumer markets. Headquartered in Medina, Ohio, RPM manufactures and markets a diverse portfolio of high-performance coatings, sealants, adhesives, and construction materials. The company operates through well-known brands like Rust-Oleum, DAP, Tremco, and Carboline, offering solutions for waterproofing, corrosion control, flooring, and restoration. RPM serves a broad customer base, including contractors, industrial manufacturers, and DIY enthusiasts, ensuring resilience across economic cycles. With a strong focus on innovation and sustainability, RPM continues to expand its product offerings in high-growth segments such as infrastructure maintenance, energy efficiency, and environmental protection. The company’s global footprint and diversified revenue streams position it as a key player in the $1.5 trillion specialty chemicals market.

Investment Summary

RPM International presents a compelling investment case due to its diversified product portfolio, strong brand recognition, and consistent dividend growth (currently yielding ~1.4%). The company benefits from steady demand in construction and industrial maintenance, supported by infrastructure spending trends. However, RPM faces risks from raw material cost volatility, competitive pricing pressures, and exposure to cyclical end markets. Its moderate leverage (net debt/EBITDA ~2.5x) and strong cash flow generation ($1.12B operating cash flow in FY2024) provide financial flexibility. Investors should weigh its defensive qualities against potential margin compression in inflationary environments.

Competitive Analysis

RPM International holds a competitive edge through its diversified brand portfolio, which allows it to serve multiple niche markets simultaneously. Unlike pure-play competitors, RPM’s balanced exposure to industrial (55% of sales) and consumer (45%) segments provides stability. The company’s strong distribution network and technical service capabilities differentiate it in industrial coatings and construction chemicals. RPM invests ~2% of sales in R&D, focusing on sustainable and high-performance formulations—a key advantage as regulations tighten. However, it faces intense competition from larger chemical conglomerates (e.g., PPG, Sherwin-Williams) in commoditized segments. RPM’s acquisition strategy (40+ acquisitions since 2010) has bolstered its market position but requires ongoing integration discipline. Pricing power varies by segment, with premium positioning in specialty products offset by margin pressures in DIY retail channels.

Major Competitors

• Sherwin-Williams Company (SHW): Sherwin-Williams dominates architectural paints and coatings with superior retail distribution (4,900+ stores). Its scale provides cost advantages, but RPM outperforms in niche industrial segments like roofing systems and corrosion control. SHW’s heavy debt load ($10.4B) limits M&A flexibility compared to RPM.
• PPG Industries, Inc. (PPG): PPG’s global scale in automotive and aerospace coatings contrasts with RPM’s focus on construction. PPG leads in technology-driven coatings but lacks RPM’s strong DIY brand portfolio. Both companies face similar raw material challenges, though PPG’s larger R&D budget ($500M+) gives it an edge in innovation.
• Axalta Coating Systems Ltd. (AXTA): Axalta specializes in transportation coatings, competing minimally with RPM’s core markets. However, Axalta’s refinish coatings business overlaps with RPM’s industrial maintenance products. RPM’s broader end-market diversification provides more stable earnings than Axalta’s auto-centric exposure.
• Eastman Chemical Company (EMN): Eastman’s specialty materials (e.g., adhesives resins) compete with RPM’s industrial formulations. Eastman’s backward integration in raw materials is a cost advantage, but RPM’s construction-focused distribution network delivers better margins in installation-ready products.
• GCP Applied Technologies Inc. (GCP): GCP (now part of Saint-Gobain) was a direct competitor in concrete admixtures and roofing systems. RPM’s stronger brand portfolio and vertical integration in sealants gave it an edge prior to GCP’s acquisition.