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Pentair: This Dividend Aristocrat Offers Stability But Not Much Growth

Published Thu, 10 Sep 2020 11:47:26 -0400 on Seeking Alpha

Seeking AlphaDividend Ideas | Industrial  | United KingdomPentair: This Dividend Aristocrat Offers Stability But Not Much GrowthSep. 10, 2020 11:47 AM ET|| About: Pentair plc (PNR), Includes: EMR, NVTby: Ian BezekIan Bezek Ian's Insider CornerResearch and trade alerts from a hedge fund pro with a global outlook.SummaryI expect investors to pay more for high-quality income streams in a low interest rate world going forward.
Pentair, as a Dividend Aristocrat from the industrial sector, seems like a worthy candidate. The 21x forward earnings multiple isn't too demanding.
However, the company has struggled to grow in recent years, and its dividend yield and dividend growth rate are both quite low.
I see better options within the industrials space.
Looking for a steady industrial stock with an established dividend growth record, a decent starting valuation, and a Covid-19 tailwind angle? At first glance, Pentair (PNR) might seem to fit the bill. There are the elements of a good story here potentially. However, there are still a few missing pieces at the moment.
For those unfamiliar with the company, I last covered Pentair just over a year ago and offered some more backstory on the firm. The company is a leader in water filtration and associated products globally. It has taken its strong position in that niche and created an enviable dividend growth record, as it has currently hiked the dividend for 44 years in a row. And, given the company's low profile and modest growth track record, it can now be had at a not too aggressive 21x forward earnings.
While the world has been exceptionally volatile in 2020, it hasn't brought any unusually large changes to Pentair. Aside from the brief crash in March, Pentair continues to trade in its usual $35-$45 range where it has spent the better part of the last five years:

Source: Finviz
For many Dividend Aristocrats, a period of a few years of quiet consolidation often paves the way for a big move... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
EMERSON ELECTRIC 64.71   18.4 3.52 1.96 3.02


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