Pentair plc (NYSE:PNR) has pleased shareholders over the past 10 years, paying out an average dividend of 2.00% annually. The stock currently pays out a dividend yield of 1.62%, and has a market cap of US$7.69b. Should it have a place in your portfolio? Let’s take a look at Pentair in more detail. Check out our latest analysis for Pentair
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has the amount of dividend per share grown over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it have the ability to keep paying its dividends going forward?
Does Pentair pass our checks?
The company currently pays out 49.79% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect PNR’s payout to fall to 36.62% of its earnings, which leads to a dividend yield of around 2.17%. Furthermore, EPS is also forecasted to fall to $2.11 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment moving forward.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of PNR it has increased its DPS from $0.68 to $0.70 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.In terms of its peers, Pentair produces a yield of 1.62%, which is on the low-side for Machinery stocks.
Considering the dividend attributes we analyzed above, Pentair is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three pertinent factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for PNR’s future growth? Take a look at our free research report of analyst consensus for PNR’s outlook.
- Valuation: What is PNR worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether PNR is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.