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

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·3 min read
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Primo Water Corporation’s PRMW steady customer addition and organic growth are boosting its performance.

Let’s focus on the factors that make this provider of sustainable drinking water solutions having a Zacks Rank #2 (Buy) a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Growth Projections

The Zacks Consensus Estimate for 2021 earnings per share and revenues is pegged at 64 cents and $2.08 billion, suggesting an increase of 16.4% and 6.4%, respectively, from the year-ago reported figures.

The consensus mark for 2022 earnings and revenues is pegged at 70 cents per share and $2.18 billion, respectively. The bottom- and top-line estimates suggest a 9.4% and 5% year-over-year increase, respectively.

Surprise History

Primo Water’s trailing four-quarter earnings surprise is 18.7%, on average.

Dividend Yield & Share Buyback Plan

Its dividend yield is currently pegged at 1.47%, which is better than the Zacks S&P 500 composite’s yield of 1.42%.

During the second quarter, the company repurchased 800,000 common shares for $13 million under the previously announced share repurchase program of up to $50 million of its outstanding common shares. The systematic buyback of shares will increase shareholders value.

Regular Investments

Primo Water makes consistent investments to upgrade and maintain the existing infrastructure for providing 24x7 reliable services to the expanding customer base. In 2021, the company aims to invest $135 million to strengthen its operation. The company sets aside $40-$60 million per year to make acquisitions and expand its footprint.

Another water utility, American Water Works AWK is also very active in upgrading its water and wastewater infrastructure as well as making regular investments. American Water has plans to invest $10.4 billion in the 2021-2025 time period and $22-$25 billion in the next decade.

Price Performance

Over the past 12 months, the stock has gained 14.1% compared with the industry’s growth of 10.8%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Other Stocks to Consider

Other top-ranked stocks in the same sector include California Water Service Group CWT and American States Water Company AWR, each currently holding a Zacks Rank #2 (Buy).

California Water Service delivered an average earnings surprise of 15.4% in the last four quarters. The Zacks Consensus Estimate for 2021 earnings has moved up 1.1% in the past 60 days.

American States Water delivered an average earnings surprise of 4.4% in the last four quarters. The Zacks Consensus Estimate for 2021 earnings has moved up 0.4% in the past 60 days.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

American Water Works Company, Inc. (AWK) : Free Stock Analysis Report

California Water Service Group (CWT) : Free Stock Analysis Report

American States Water Company (AWR) : Free Stock Analysis Report

Primo Water Corporation (PRMW) : Free Stock Analysis Report

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