Critical Analysis: Primo Brands (PRMB) & Its Peers

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

Earnings and Valuation

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Primo Brands	$4.84 billion	$238.10 million	19.11
Primo Brands Competitors	$72.35 billion	$732.69 million	16.24

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

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 0.9% and pay out 19.1% of their earnings in the form of a dividend.

Institutional & Insider 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 company insiders. Comparatively, 14.5% of shares of all “Bottled & canned soft drinks” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Primo Brands and its rivals’ 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%

Analyst Recommendations

This is a summary of recent ratings and price targets for Primo Brands and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Primo Brands	0	0	1	0	3.00
Primo Brands Competitors	192	654	1221	114	2.58

Primo Brands currently has a consensus price target of $33.00, suggesting a potential upside of 7.25%. As a group, “Bottled & canned soft drinks” companies have a potential upside of 26.74%. Given Primo Brands’ rivals higher probable upside, analysts plainly believe Primo Brands has less favorable growth aspects than its rivals.

Volatility & Risk

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

Summary

Primo Brands rivals 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.