A
tactic for snipers is to target the crosshairs at a certain spot. When the
target crosses into the crosshairs, it is acquired. That is a good
tactic to use for dividend paying stocks such as Park National (NYSE: PRK).
Around
since 1908, Park National is a midwestern small cap bank that is
headquartered in Newark, Ohio.
Any
investor has to be pleased and impressed by any bank that survived both The
Great Depression and The Great Recession. That stability is very appealing for
long-term shareholders. It clearly demonstrates that Park National has a sound
business model and a solid management.
That
leadership team also has respect for its shareholders.
This
is clearly demonstrated by the 4.45 percent dividend yield. By contrast, the
dividend yield for JP Morgan (NYSE: JPM)
is 2.59 percent. For Wells Fargo (NYSE: WFC),
Warren Buffett’s favorite bank, it is 2.65 percent.
Park
National also has healthy financials.
The
profit margin is 28.60 percent. Park National’s return-on-investment is 23.80
percent. That is an important indicator as it measures the efficiency of a
company and how well it performs for the investor. JP Morgan’s
return-on-investment is 6.70 percent. The return-on-investment for Wells Fargo
is 9.90 percent.
Here
is where the sniper’s tactic of setting a target and then pulling the trigger
come enters.
At
present, Park National is trading around $81 a share. Back in July it was at
$65. It is close to its 52-week high. The target price from the analyst
community is $80. There is a short float of 4.96 percent (5 percent is
considered to be troubling). It has an above average beta of 1.22, so the price
moves up and down over 20 percent more than the stock market as a
whole.
Those
all suggest the stock could fall in price.
As
such, an investor might consider setting a target dividend rate of 5 percent.
When that happens through either the share price dropping or management raising
the dividend, that could be the time to buy for Park National. The company is
profitable, has been around over a century, and there is some recent insider
buying. Those are all bullish for the future. Buying Park National on the dips
could make for a rewarding long-term total return for the shareholders.
Read more
Benzinga.com small-cap articles: http://www.benzinga.com/news/small-cap
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