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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Primo in Focus
Primo (PRMW - Free Report) is headquartered in Tampa, and is in the Utilities sector. The stock has seen a price change of -13.71% since the start of the year. The maker of pure-play water solutions is currently shelling out a dividend of $0.08 per share, with a dividend yield of 2.39%. This compares to the Utility - Water Supply industry's yield of 2.24% and the S&P 500's yield of 1.75%.
In terms of dividend growth, the company's current annualized dividend of $0.32 is up 14.3% from last year. Primo has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 6.47%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Primo's payout ratio is 51%, which means it paid out 51% of its trailing 12-month EPS as dividend.
PRMW is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $0.80 per share, with earnings expected to increase 19.40% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, PRMW is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Primo (PRMW) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Primo in Focus
Primo (PRMW - Free Report) is headquartered in Tampa, and is in the Utilities sector. The stock has seen a price change of -13.71% since the start of the year. The maker of pure-play water solutions is currently shelling out a dividend of $0.08 per share, with a dividend yield of 2.39%. This compares to the Utility - Water Supply industry's yield of 2.24% and the S&P 500's yield of 1.75%.
In terms of dividend growth, the company's current annualized dividend of $0.32 is up 14.3% from last year. Primo has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 6.47%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Primo's payout ratio is 51%, which means it paid out 51% of its trailing 12-month EPS as dividend.
PRMW is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $0.80 per share, with earnings expected to increase 19.40% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, PRMW is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).