Last quarter PETS beat by 3 cents, and this quarter the earnings beat was by 6 cents. This means that the 5.8% dividend yield is sustainable based on these higher earnings. Also, it reduces the earnings multiple, making the stock cheaper. The consecutive earnings beats contract the trailing P/E ratio, and add money to the company's cash pile.
This earnings beat was meaningful because it was a beat on the top and bottom line. Based on the earnings beat of 6 cents, we can also see that all those television commercials have had a positive effect on revenues and gross profit.
This stock can run another 15-25% based on this previous quarter and new outlook.
On the morning of its 4th consecutive earnings beat I sold half my position at $17.24. I think I can buy some of it back here below $16.00. I don't have a crystal ball and do not know if it will keep falling to the low 15s or even back into the 14s, but at least at this point, any buying is buying back in at a lower price.... And there's nothing wrong with getting my full position back at a lower price.
Yes, good luck to you, too. I believe in the story here. I know there are a lot more companies jumping into the pet-pharmacuticals sector, however, this company has built some name recognition with their many TV commercials and number of years already in the game.
I bought this stock below $10, so while the dividend is currently 4.6%, I am earning a 6.2% yield on my original investment. I still think it's worth a buy here--a 4.6% yield is nothing to shake a stick at--because the last two quarters were good and the economy is turning around, so this juicy dividend is safe.
Waiting for the dust to settle is smart to get the price you want, and this rally is getting a little 'long in the tooth'. So maybe with a little pullback, you could get a bid on an 11 or 12 handle. This stock is about to hit the resistance level of its 52-week high. If it can't break through resistance, you may get your price, but if the economy stays strong, this stock could be off to the races. We'll see...
I didn't give you the thumbs down, but actually the higher the price goes, the lower the dividend will be. It's now well under 5%. My concern is will the company continue with it's dividend. They said that future evaluation needs to be made. I collected the special dividend in 2012 which cost the company about 20 million. We also have a big IPO for another pet medical company with online services coming soon. Cramer likes this IPO and they may take control of online animal medications.