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Reasons to Add Primo Water (PRMW) to Your Portfolio Now

Primo Water Corporation’s PRMW rising earnings estimates and organic customer growth make it a great investment in the utility sector. The increasing water demand will also boost the company’s performance.

Currently, the company carries a Zacks Rank #2 (Buy). Let’s look at the factors that are driving the stock.

Growth Projections

The Zacks Consensus Estimate for PRMW’s 2024 and 2025 earnings per share increased nearly 8% and 2.8%, respectively, in the last 60 days.

The company's long-term (three to five years) earnings growth rate is 15.47%.

Surprise History, Dividend Details & Share Repurchase

Primo Water has a positive earnings surprise history. Its trailing four-quarter earnings surprise is 3.18%, on average.

The company has consistently paid shareholders a cash dividend on its common stock since 2014. It increased its dividend 13 times in the past five years, and its payout has grown 9.72% over the same period. Its current dividend yield is 1.71%, which is better than the Zacks S&P 500 composite’s yield of 1.61%.

The company is also repurchasing its shares to increase shareholders’ value. It plans to repurchase shares worth $75 million in 2024 and has already purchased shares worth $9 million.

Liquidity

PRMW’s current ratio is 2.13, better than the industry average of 1.11. The current ratio, being greater than one, indicates the company has enough short-term assets to meet its short-term obligations.

Investments

PRMW is making continuous investments to improve its infrastructure. The company invested $437.7 million between 2021 and 2023. It aims to invest $153.4 million in 2024.

Price Performance

Shares of Primo Water have gained 16.9% in the past three months compared with the industry’s 1.1% growth.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Other Stocks to Consider

Other top-ranked stocks in the industry are California Water Service Group CWT, UGI Corporation UGI and Fortis Inc. FTS. California Water Service Group currently sports a Zacks Rank #1 (Strong Buy) while UGI and Fortis  currently carry a Zacks Rank of 2. You can see the complete list of Zacks Rank #1 stocks here.

California Water delivered an average earnings surprise of 85.16% in the last four quarters. The Zacks Consensus Estimate for earnings for 2024 earnings indicates year-on-year growth of 246.15%.

UGI delivered an average earnings surprise of 19.13% in the last four quarters. The consensus estimate for earnings for 2024 and 2025 has gone up 0.69% and 0.32% respectively, in the last 90 days.

Fortis delivered an average earnings surprise of 4.17% in the last four quarters. The Zacks Consensus Estimate for earnings for 2024 and 2025 indicates year-over-year growth of 2.19% and 2.66%, respectively.

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To read this article on Zacks.com click here.

Zacks Investment Research