Portfolio Update
The FiveTwenty portfolio received no dividends in the past week.
| Past Week Dividend | $0 |
| Current Quarter Dividend (Q4 2022) | $258.78 |
| LifeTime Dividend | $6,554.06 |
| Estimated Annual Dividend | $6,822.51 |
The capital allocation for the week of 10/30/2022 to 11/05/2022 will be used to add to our position in Polaris Inc. (NYSE: PII).
PII – Position Update
Since our last check-in on PII in week 25 of 2022, the company reported Q2 2022 earnings on 07/26/2022, and Q3 2022 earnings on 10/25/2022. In addition, the share price increased 4.4% from $97.54 to $101.82.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 27 years | 27 years | |
| Yield | 2.50% | 2.62% | 2% |
| Payout Ratio | 27.96%1 | 27.68%2 | |
| P/E | 11.161 | 11.992 |
1 computed using TTM adjusted EPS of $9.12 as of Q3 2022
2 computed using TTM adjusted EPS of $8.13 as of Q1 2022
Q3 2022 earnings report
Did PII’s latest earnings report raise any warning flags?
After two quarters, Q1 and Q2, at the beginning of the year where PII saw its adjusted earnings and adjusted EPS come in lower than during the same periods in 2021 despite flat or growing revenues numbers, the company saw a surge in revenues, adjusted net income, and adjusted EPS in Q3 2022. Overall, revenues grew 32%, adjusted net earnings increased 58%, and adjusted EPS were 64% higher than in Q3 2021.
| Revenue (in millions) | Adj. Net Income (in millions) | Adj. EPS . | |
| Q3 2021 | $1,778 | $123.5 | $1.98 |
| Q3 2022 | $2,341 | $195.1 | $3.25 |
| % Change | 32% | 58% | 64% |
Additional noteworthy developments during the quarter:
- Sales in Q3 2022 were driven higher by accelerated shipments, higher pricing and a favorable product mix.
- PII also increased gross profit margin during the quarter.
Looking ahead, PII expects sales to increase 15% to 16% compared to 2021. This is up from a 13% to 16% increase in the previous guidance. Adjusted EPS guidance remained unchanged at $10.10 to $10.30 for the full year 2022.
Thesis
Why are we adding to our position in PII?
Following the Q3 2022 earnings report it looks like PII is turning the corner for FY 2022 and is on track to hits its full year earnings guidance.
We are adding to our position in PII, due to our continued belief in the long term performance of the company.
Previous Articles
- 2022 Week 25: Polaris Inc (NYSE: PII)
- 2022 Week 21: Polaris Inc (NYSE: PII)
- 2022 Week 16: Polaris Inc (NYSE: PII)
Additional Research
Photo by Roberto Nickson on Unsplash