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Reasons to Add Primo Water (PRMW) to Your Portfolio Now
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Primo Water Corporation’s growth prospects, strong dividend history and rising earnings estimates make it a great investment opportunity in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a robust investment option at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for the company’s 2024 EPS has increased 17.33% to 88 cents in the past 60 days. The Zacks Consensus Estimate for PRMW’s 2025 earnings per share (EPS) has risen 48.6% to $1.07 per share in the past 60 days.
Primo Water’s (three to five years) earnings growth rate is pegged at 12.9%.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing funds to generate higher returns. Currently, PRMW’s ROE is 8.55%, higher than the sector’s average of 8.46%. This indicates that the company has been utilizing funds more constructively than its peers in the utility sector.
Solvency & Liquidity
Primo Water’s times interest earned ratio (TIE) at the end of the fourth quarter of 2023 was 2.3. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
The current ratio at the end of the fourth quarter was 2.03, much higher than the industry’s average of 0.77. The ratio, being greater than one, indicates Primo Water’s ability to meet its future short-term liabilities without difficulties.
Dividend History
PRMW has been increasing shareholders’ value through dividend payments. In February 2024, Primo Water announced a quarterly dividend of 9 cents per share, an increase of 12.5% from the previous level of 8 cents per share, resulting in an annual dividend of 36 cents per share. PRMW’s current dividend yield is 2.01%, better than the Zacks S&P 500 composite’s yield of 1.3%.
Price Performance
In the past three months, Primo Water stock has returned 20.2% against the industry’s 5.1% decline.
AWR’s long-term earnings growth rate is 6.3%. The company delivered an average earnings surprise of 3.12% in the last four quarters.
AWK’s long-term earnings growth rate is 8%. The Zacks Consensus Estimate for American Water Works’ 2024 EPS is pegged at $5.22, which implies a year-over-year improvement of 6.53%.
CWCO’s long-term earnings growth rate is 8%. The company delivered an average earnings surprise of 61.56% in the last four quarters.
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Reasons to Add Primo Water (PRMW) to Your Portfolio Now
Primo Water Corporation’s growth prospects, strong dividend history and rising earnings estimates make it a great investment opportunity in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a robust investment option at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for the company’s 2024 EPS has increased 17.33% to 88 cents in the past 60 days. The Zacks Consensus Estimate for PRMW’s 2025 earnings per share (EPS) has risen 48.6% to $1.07 per share in the past 60 days.
Primo Water’s (three to five years) earnings growth rate is pegged at 12.9%.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing funds to generate higher returns. Currently, PRMW’s ROE is 8.55%, higher than the sector’s average of 8.46%. This indicates that the company has been utilizing funds more constructively than its peers in the utility sector.
Solvency & Liquidity
Primo Water’s times interest earned ratio (TIE) at the end of the fourth quarter of 2023 was 2.3. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
The current ratio at the end of the fourth quarter was 2.03, much higher than the industry’s average of 0.77. The ratio, being greater than one, indicates Primo Water’s ability to meet its future short-term liabilities without difficulties.
Dividend History
PRMW has been increasing shareholders’ value through dividend payments. In February 2024, Primo Water announced a quarterly dividend of 9 cents per share, an increase of 12.5% from the previous level of 8 cents per share, resulting in an annual dividend of 36 cents per share. PRMW’s current dividend yield is 2.01%, better than the Zacks S&P 500 composite’s yield of 1.3%.
Price Performance
In the past three months, Primo Water stock has returned 20.2% against the industry’s 5.1% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are American States Water (AWR - Free Report) , American Water Works (AWK - Free Report) and Consolidated Water (CWCO - Free Report) , each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AWR’s long-term earnings growth rate is 6.3%. The company delivered an average earnings surprise of 3.12% in the last four quarters.
AWK’s long-term earnings growth rate is 8%. The Zacks Consensus Estimate for American Water Works’ 2024 EPS is pegged at $5.22, which implies a year-over-year improvement of 6.53%.
CWCO’s long-term earnings growth rate is 8%. The company delivered an average earnings surprise of 61.56% in the last four quarters.