Primo Water(US:PRMW) ZACKSยท2024-05-31 11:35Core Viewpoint - Primo Water Corporation (PRMW) is positioned as a strong investment opportunity in the utility sector due to rising earnings estimates, stable return on equity (ROE), and growth prospects driven by organic customer base growth and increasing water demand [1] Growth Projections & Surprise History - The Zacks Consensus Estimate for 2024 and 2025 EPS has increased by 7.9% to 95 cents and by 2.8% to $1.10, respectively, over the past 60 days [2] - The long-term earnings growth rate for Primo Water is projected at 15.5% over the next three to five years [2] Dividend & Share Repurchase - In February 2024, Primo Water announced a quarterly dividend of 9 cents per share, marking a 12.5% increase from the previous 8 cents, resulting in an annual dividend of 36 cents [3] - The current dividend yield stands at 1.62%, slightly above the Zacks S&P 500 composite yield of 1.61% [3] - The company repurchased shares worth $89 million from 2021 to 2023 and plans to buy back shares worth $73 million in 2024 [4] Return on Equity - Primo Water's ROE is currently at 10.3%, surpassing the sector average of 9.31%, indicating more effective utilization of funds compared to peers in the utility sector [5] Investments - The company has consistently invested in strengthening its infrastructure, with $437.7 million invested from 2021 to 2023 and plans to invest $153.4 million in 2024 [6] Solvency & Liquidity - The times interest earned (TIE) ratio at the end of Q1 2024 was 2.8, indicating the company can meet its interest payment obligations without issues [7] - The current ratio at the end of Q1 was 2.014, significantly higher than the industry average of 1.15, demonstrating the ability to meet future short-term liabilities [7] Price Performance - Over the past year, Primo Water's stock has returned 72.7%, in contrast to a 5.3% decline in the industry [8]