Daily Stock Tip: PetMed Express (PETS)

I'm now looking for a third consumer cyclical sector representative for my new Ivy portfolio.

That cyclicals sector includes twenty-eight industries ranging from Advertising Agencies to Apparel, Autos, Broadcasting, Department Stores, Gambling, Leisure, Lodging, Packaging, Personal Services, Shoes, Restaurants, Rubber, Plastics, Textiles, and all such consumer aimed enterprises.

Today I'm reviewing a small-cap pharmaceuticals retailer, named PetMed Express Inc Its trading ticker symbol is PETS.

PetMed Express Inc is a nationwide pet pharmacy. The Company markets prescription and non-prescription pet medications and other health products for dogs, cats, and horses direct to the consumer.

The company offers non-prescription medications and supplies, and other specialty medications, as well as generic substitutes. It also sells food, beds, crates, stairs, strollers, and other pet supplies.

The company sells its products through its Internet Website; telephone contact center; and direct mail/print through brochures and postcards.

PetMed Express, Inc. was founded in 1996 and is headquartered in Delray Beach, Florida.

I use three key data points to gauge the value of any dividend equity-like PetMed Express Inc:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest.

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

PETS Price

PetMed's price per share closed at $23.00 Yesterday. A year ago its price was $45.20. So price dropped $22.20 per share last year, or  49%.

Assuming PetMed's stock trades in the range of $20 to $40 next year, PetMed's recent $23.00 price could pick up by $2.00 and go to $25.00 by late-January, 2020.

PETS Dividends

PetMed's most recent Quarterly dividend was $0.27 payable February 15th.

That $0.27 quarterly payout equates to a  $108 annual payout and a yield of 4.7% at yesterday's $23.00 closing price.

Gains For PETS?

Adding the $1.08 annual estimated dividend to PetMed Express Inc shows a $3.08 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Say we put a little under $1,000.00 today at the $23.00 recent stock price would buy us 43 PetMed Express Inc shares.

A $10 broker fee paid half at purchase and half at sale costs $0.23 per share.

Subtract that $0.23 brokerage cost from the estimated $3.08 gross annual gain leaves a net gain of $2.85 X 43 shares

= $122.05

for a 12.25% net gain on a $998.63 investment.

Therefore, PetMed Express Inc whose trading ticker symbol is PETS, now shows a possible net gain of 12.25% including its estimated 4.7% dividend yield.

Three brokers cover this stock:

One says "Buy" PETS shares

One says PETS will "Underperform" peers

One says "sell" PETS

Their recommendations grade out as "Hold" PETS

Therefore, you can look at PetMed Express Inc and see it has made money, is making money, and could make 12.25% over the next year including its 4.7% estimated dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to determine if PetMed Express Inc is worth your time and money.

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