Why PetSmart Is Poised to Keep Running
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, pet food and products retailer PetSmart has earned a respected four-star ranking.
With that in mind, let's take a closer look at PetSmart and see what CAPS investors are saying about the stock right now.
PetSmart facts
Headquarters (Founded) | Phoenix (1986) |
Market Cap | $7.4 billion |
Industry | Specialty stores |
Trailing-12-Month Revenue | $6.5 billion |
Management | Chairman/CEO Robert Moran |
Return on Equity (average, past 3 years) | 24.7% |
Cash/Debt | $317.3 million / $535.6 million |
Dividend Yield | 1% |
Competitors | Petco |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 94% of the 754 members who have rated PetSmart believe the stock will outperform the S&P 500 going forward.
Just last week, one of those bulls, fellow Fool Thomas Engle (TMF1000), succinctly summed up the bull case for our community:
The big potential growth driver for PetSmart is the decline of the over 13,000 pet shops that are independently owned in the U.S. The number of small pet shops is growing smaller each year. PetSmart buying power is much larger than those companies which give them a big advantage. I believe PetSmart will benefit from the contraction of the number of small pet shops for many years to come.
I don't think PetSmart will grow rapidly, but they should give investors a steady return and steady growth. They generate huge streams of cash flow on existing stores, so they can pay a larger dividend and/or keep buying back shares. I believe, they will easily beat the S&P500 over the next ten years.
If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, PetSmart may not be your top choice.
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The article Why PetSmart Is Poised to Keep Running originally appeared on Fool.com.
Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends PetSmart. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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