Critical Analysis: Primo Brands (PRMB) & Its Rivals

Primo Brands (NYSE:PRMB) is one of 18 publicly-traded companies in the “Bottled & canned soft drinks” industry, but how does it contrast to its peers? We will compare Primo Brands to related companies based on the strength of its valuation, earnings, profitability, dividends, institutional ownership, risk and analyst recommendations.

Insider and Institutional Ownership

87.7% of Primo Brands shares are held by institutional investors. Comparatively, 48.3% of shares of all “Bottled & canned soft drinks” companies are held by institutional investors. 2.5% of Primo Brands shares are held by insiders. Comparatively, 14.5% of shares of all “Bottled & canned soft drinks” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Primo Brands and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Primo Brands	13.63%	8.80%	3.62%
Primo Brands Competitors	9.09%	19.71%	7.31%

Volatility & Risk

Primo Brands has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Primo Brands’ peers have a beta of 0.90, meaning that their average stock price is 10% less volatile than the S&P 500.

Dividends

Primo Brands pays an annual dividend of $0.36 per share and has a dividend yield of 1.2%. Primo Brands pays out 22.4% of its earnings in the form of a dividend. As a group, “Bottled & canned soft drinks” companies pay a dividend yield of 1.0% and pay out 19.1% of their earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent recommendations for Primo Brands and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Primo Brands	0	0	1	0	3.00
Primo Brands Competitors	190	653	1219	114	2.58

Primo Brands presently has a consensus price target of $33.00, suggesting a potential upside of 6.52%. As a group, “Bottled & canned soft drinks” companies have a potential upside of 25.64%. Given Primo Brands’ peers higher possible upside, analysts plainly believe Primo Brands has less favorable growth aspects than its peers.

Earnings and Valuation

This table compares Primo Brands and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Primo Brands	$4.84 billion	$238.10 million	19.24
Primo Brands Competitors	$72.35 billion	$732.69 million	16.50

Primo Brands’ peers have higher revenue and earnings than Primo Brands. Primo Brands is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

Primo Brands peers beat Primo Brands on 8 of the 15 factors compared.

About Primo Brands

Primo Water Corporation is a leading pure-play water solutions provider in North America and Europe. Primo operates largely under a recurring razor/razorblade revenue model. The razor in Primo’s revenue model is its industry leading line-up of sleek and innovative water dispensers, which are sold through major retailers and online at various price points or leased to customers. The dispensers help increase household penetration, which drives recurring purchases of Primo’s razorblade offering. Primo’s razorblade offering is comprised of Water Direct, Water Exchange, and Water Refill. Primo’s water solutions expand consumer access to purified, spring and mineral water to promote a healthier, more sustainable lifestyle while simultaneously reducing plastic waste and pollution. Primo is committed to its water stewardship standards and is proud to partner with the International Bottled Water Association in North America as well as with Watercoolers Europe.