PNR - Pentair PLC: Relatively Overpriced

2024-05-22 15:11:53 ET

Summary

• Pentair PLC stock has returned about 72%, over twice as much as the S&P 500 over the past two years.
• The company's financial fortunes have turned around, with a drop in cost of sales and improved capital structure.
• The stock's dividend is much less attractive than the 10 Year Note. The stock would need to trade at a deep discount for it to be worth buying.

It’s been about two years since I suggested that I’d buy Pentair PLC ( PNR ) if the relative merits of the stock were superior to Treasuries. The problem for me was that the stock was inferior to the Treasury, so I eschewed the shares. After dropping about 26% over the next five months, the stock spiked higher in price and has now returned about 72% relative to the 29% return for the S&P 500 over the same time period. I thought it’d be worthwhile to have another look at this so-called “dividend aristocrat” and so I’m taking another look. I’m going to review the latest financial data, and once again compare this stock to the risk-free alternatives available to investors right now....

For further details see: