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Pentair (PNR) Rewards Shareholders With 5% Hike in Dividend
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Pentair Plc (PNR - Free Report) recently announced a 5% hike in quarterly dividend payout — marking its 46th consecutive year of dividend increase. This is in sync with its long-standing commitment of returning capital to shareholders.
Pentair will pay the new quarterly dividend of 21 cents on Feb 4, 2022, to shareholders on record as of Jan 21, 2022. The raised dividend takes the company’s dividend yield from the current 1.06% to 1.11%, which is higher than the industry’s 0.3%.
Pentair has a three-year dividend growth rate of 4.6%. It has a payout ratio of 24.4% — higher than the industry’s 8.9%. Free cash flow during the first nine months of 2021 was $505 million, an 11% improvement from the comparable period last year. The company anticipates free cash flow to be greater than 100% of net income in 2021 driven by strong demand and continued disciplined working capital management. Pentair has returned $200 million to shareholders through dividends and share repurchases so far this year. The company ended the third quarter of 2021 with cash balance of $173 million. As of Sep 30, 2021, the company had $700 million available under its share repurchase authorization.
Meanwhile, the company has been focused on lowering its debt levels. The company’s total debt to total capital ratio stood at 0.23 at the end of third-quarter 2021, lower than the industry’s 0.25. Its total debt to total capital ratio has gone down considerably over the past several quarters. Pentair's times interest earned ratio has improved over the last few quarters and is currently pegged at 39.
Pentair has been benefiting from the strong demand for swimming pools during the pandemic last year as consumers stayed home and invested in their backyards. Even this year consumers continue to enhance their at-home quality of life by investing in pools. Several builders are reporting backlogs into the second half of next year. Apart from pool construction, demand for pool maintenance remains strong. Meanwhile, activity in industrial and commercial businesses continues to pick up. These factors will continue to boost Pentair’s top-line performance.
Pentair’s plans to expand in the areas of pool and residential and commercial water treatment through investments and acquisitions will drive growth. Cost-reduction initiatives, strong product pipeline and concerted efforts to make investments in digital transformation and technology will also favor the company. The company has embarked on a Transformation Program that will lead to margin expansion of at least 300 basis points by 2025. We believe that impressive financial performance in the upcoming quarters will enable it to continue rewarding its shareholders.
Price Performance
Image Source: Zacks Investment Research
In the past year, the stock has gained 42.1% compared with the industry’s rally of 47.5%.
SiteOne Landscape has an estimated earnings growth rate of around 77.2% for the current year. In the past 30 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 14%.
In a year’s time, the company’s shares have increased 68%. SiteOne Landscape has a trailing four-quarter earnings surprise of 130.9%, on average.
A. O. Smith has an expected earnings growth rate of around 35% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised upward by 1% in the past 30 days.
A. O. Smith’s shares have surged 44% in a year’s time. The company has a trailing four-quarter earnings surprise of 16.8%, on average.
ScanSource has a projected earnings growth rate of around 19% for 2021. The Zacks Consensus Estimate for current-year earnings has been revised upward by 1% in the past 30 days.
The company’s shares have appreciated 23% over the past year. ScanSource has a trailing four-quarter earnings surprise of 34.6%, on average.
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Pentair (PNR) Rewards Shareholders With 5% Hike in Dividend
Pentair Plc (PNR - Free Report) recently announced a 5% hike in quarterly dividend payout — marking its 46th consecutive year of dividend increase. This is in sync with its long-standing commitment of returning capital to shareholders.
Pentair will pay the new quarterly dividend of 21 cents on Feb 4, 2022, to shareholders on record as of Jan 21, 2022. The raised dividend takes the company’s dividend yield from the current 1.06% to 1.11%, which is higher than the industry’s 0.3%.
Pentair has a three-year dividend growth rate of 4.6%. It has a payout ratio of 24.4% — higher than the industry’s 8.9%. Free cash flow during the first nine months of 2021 was $505 million, an 11% improvement from the comparable period last year. The company anticipates free cash flow to be greater than 100% of net income in 2021 driven by strong demand and continued disciplined working capital management. Pentair has returned $200 million to shareholders through dividends and share repurchases so far this year. The company ended the third quarter of 2021 with cash balance of $173 million. As of Sep 30, 2021, the company had $700 million available under its share repurchase authorization.
Meanwhile, the company has been focused on lowering its debt levels. The company’s total debt to total capital ratio stood at 0.23 at the end of third-quarter 2021, lower than the industry’s 0.25. Its total debt to total capital ratio has gone down considerably over the past several quarters. Pentair's times interest earned ratio has improved over the last few quarters and is currently pegged at 39.
Pentair has been benefiting from the strong demand for swimming pools during the pandemic last year as consumers stayed home and invested in their backyards. Even this year consumers continue to enhance their at-home quality of life by investing in pools. Several builders are reporting backlogs into the second half of next year. Apart from pool construction, demand for pool maintenance remains strong. Meanwhile, activity in industrial and commercial businesses continues to pick up. These factors will continue to boost Pentair’s top-line performance.
Pentair’s plans to expand in the areas of pool and residential and commercial water treatment through investments and acquisitions will drive growth. Cost-reduction initiatives, strong product pipeline and concerted efforts to make investments in digital transformation and technology will also favor the company. The company has embarked on a Transformation Program that will lead to margin expansion of at least 300 basis points by 2025. We believe that impressive financial performance in the upcoming quarters will enable it to continue rewarding its shareholders.
Price Performance
In the past year, the stock has gained 42.1% compared with the industry’s rally of 47.5%.
Zacks Rank & Key Picks
Pentair currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector include SiteOne Landscape Supply (SITE - Free Report) , A. O. Smith Corporation (AOS - Free Report) and ScanSource, Inc. (SCSC - Free Report) . All of these stocks carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SiteOne Landscape has an estimated earnings growth rate of around 77.2% for the current year. In the past 30 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 14%.
In a year’s time, the company’s shares have increased 68%. SiteOne Landscape has a trailing four-quarter earnings surprise of 130.9%, on average.
A. O. Smith has an expected earnings growth rate of around 35% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised upward by 1% in the past 30 days.
A. O. Smith’s shares have surged 44% in a year’s time. The company has a trailing four-quarter earnings surprise of 16.8%, on average.
ScanSource has a projected earnings growth rate of around 19% for 2021. The Zacks Consensus Estimate for current-year earnings has been revised upward by 1% in the past 30 days.
The company’s shares have appreciated 23% over the past year. ScanSource has a trailing four-quarter earnings surprise of 34.6%, on average.