Morningstar

Primo Water Corp PRMW

Morningstar Rating
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Stock XTSE Rating as of
CAD 33.45 −0.23 (0.68%)
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As of Delayed Price Closed

Company Report

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Primo's Merger With BlueTriton Targets Cost Synergy, but Moat Is Elusive in Competitive Water Market

Dan Su

As a pure-play water provider, Primo Water has built a solid product portfolio and manufacturing and distribution footprint to tap rising demand for better-quality drinking water in North America. However, we remain skeptical that the firm benefits from any durable competitive edge based on brand intangibles or cost advantages, given the lack of differentiation and intense local competition in the water category.

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Price vs Fair Value

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PRMW is trading within a range we consider fairly valued.
Price
CAD 33.45
Fair Value
CAD 54.70
Uncertainty
Medium
1-Star Price
CAD 74.86
5-Star Price
CAD 92.79
Economic Moat
Qqyky
Capital Allocation
Wtggmmgc

Bulls Say, Bears Say

Bulls

As a pure-play large-format water solutions provider, Primo Water should benefit as residential and business clients seek better-quality water amid rising wellness awareness and concerns about municipal water.

Bears

Primo Water competes in the commoditized water market where a lack of differentiation results in low entry barriers and intense competition.

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Trading Information

Previous Close Price
CAD 33.68
Day Range
CAD 32.95–33.51
52-Week Range
CAD 17.94–35.14
Bid/Ask
CAD 32.78 / CAD 32.78
Market Cap
CAD 5.36 Bil
Volume/Avg
122,987 / 143,598

Key Statistics

Price/Earnings (Normalized)
26.30
Price/Sales
2.53
Dividend Yield (Trailing)
1.42%
Dividend Yield (Forward)
1.45%
Total Yield
1.58%

Company Profile

Primo Water is a pure-play water provider with a variety of products and services, including water delivery, exchange, refill/filtration, and water dispensers. Its operations are concentrated in North America following the divestiture of most of its international business, which has struggled to turn a profit. The firm usually initiates the customer relationship with the sale of water dispensers, and then generates recurring revenue via the water direct and exchange services (two thirds of total sales) by delivering large-format (typically three gallons or greater) water bottles to residential and commercial customers for use atop or inside the dispensers.
Sector
Consumer Defensive
Industry
Beverages - Non-Alcoholic
Stock Style Box
Mid Core
Total Number of Employees
6,400
Website
https://www.primowatercorp.com

Competitors

Valuation

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Metric
PRMW
KO
PEP
Price/Earnings (Normalized)
 26.3025.4521.41
Price/Book Value
 2.6911.8411.98
Price/Sales
 2.536.612.54
Price/Cash Flow
 15.7223.3617.16
Price/Earnings
PRMW
KO
PEP

Financial Strength

Metric
PRMW
KO
PEP
Quick Ratio
 1.820.800.60
Current Ratio
 2.181.080.83
Interest Coverage
 3.028.5214.88
Quick Ratio
PRMW
KO
PEP

Profitability

Metric
PRMW
KO
PEP
Return on Assets (Normalized)
 4.02%12.21%11.02%
Return on Equity (Normalized)
 10.38%46.22%58.48%
Return on Invested Capital (Normalized)
 6.08%17.96%18.27%
Return on Assets
PRMW
KO
PEP

Beverages - Non-Alcoholic Industry Comparables

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1-Day Chart
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Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
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NvjngtfpxCqvqt$232.9 Bil
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—Vjj$50.9 Bil
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KDP
NmhytbgpNbxgh$50.2 Bil
 Monster Beverage Corp
MNST
CqlxfmlszQxjxtx$49.9 Bil
 Coca-Cola Europacific Partners PLC
CCEP
ZhxrjkfJycfmpt$35.7 Bil
 Coca-Cola Femsa SAB de CV Series L
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 Coca-Cola Femsa SAB de CV ADR
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NxtjqbsGftph$19.5 Bil
 Celsius Holdings Inc
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VlscqfmzPqxvc$7.1 Bil
 Primo Water Corp
PRMW
QzkqscrlTxrh$4.0 Bil

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