Daily Stock Pick: Aramark Services

A portfolio of stocks I've been building since September 3, 2019, named Volio, will eventually hold 52 dividend dogs. Volio is the fifth portfolio I've built (at a one dividend dog per-week pace) since 2014. Five portfolios = V for Volio!

Today I'm reviewing the fourth of five consumer cyclical sector stocks primed to join Volio as the seventh of seven representing the sector. One of the stocks I discuss this week could be the forty-eighth overall selection for Volio!

My subject today is a mid-cap restaurant company named, Aramark Services Inc. Its trading ticker is ARMK. This is my first report on Aramark Services Inc for the Volio portfolio.

Aramark provides food, facilities, and uniform services to a variety of clients and institutions. The majority of company revenue comes from its North American food and support services segment.

Smaller but substantial segments include food and support services international and uniform and career apparel. The food and support services segments provide food for school districts; colleges; healthcare facilities; correctional institutions; and business, sports, and entertainment venues.

The uniform segment rents delivers, cleans, and maintains work clothes and ancillary items like towels and mats to customers in North America and Japan. The company has hundreds of service locations and distribution centers across the United States and Canada.

The company was formerly known as ARAMARK Holdings Corporation and changed its name to Aramark in May 2014. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.

I use three key data points to gauge dividend equities or funds like Aramark Services Inc:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether a company has made, is making, and will make money.

ARMK Price

Aramark's price per share closed at $22.57 yesterday. A year ago their price was $36.60. Price fell $14.03 or over 38.3% last year.

Assuming Aramark's stock trades in the range of $20 to $40 this next year, its recent $22.57 price might rise by $4.43 to reach $27.00 by July 30, 2021.

ARMK Dividends

Aramark's most recent declared quarterly dividend was $0.11, paid June 2nd. That $0.11 Q dividend equates to $0.44 annually for a yield of 1.95% at yesterday's $22.57 share price.

ARMK Gains?

Adding the $0.44 annual estimated dividend to my $4.43 optimistic estimate of Aramark's price upside shows a $4.87 potential gross gain, per share, to be reduced by any costs to trade the shares.

If we put little under $1,000.00 today in Aramark Services Inc we would buy 44 shares of ARMK stock.

A $10 broker fee paid half at purchase and half at sale could cost us about $0.23 per share.

Subtract that $0.23 brokerage cost from my estimated $4.87 gross gain per share results in a net gain of $4.64 X 44 shares = $204.16 for a 20.4% net gain on a $993.08 investment.

Thus, Aramark Services Inc shows a possible 20.4% net gain including a 1.95% dividend yield. It could be more, it could be less.

The above speculation is based on past performance and supposition. Only time and money invested will tell if Aramark Services Inc is worth it.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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