Pitney Bowes Inc (NYSE:PBI) is well-liked by analysts, registering a "Bullish" 8.1/10 Starmine Equity Summary Score. (The Starmine Equity Summary Score is an accuracy-weighted sentiment derived from the ratings of independent research providers. It uses the past relative accuracy of the providers in determining the emphasis placed on any individual opinion.)
Company Description (from Yahoo! Finance)
Pitney Bowes Inc. provides software, hardware, and services to enable physical and digital communications. It also offers a suite of equipment, supplies, software, services, and solutions for managing and integrating physical and digital communication channels.
Why Analysts Are Hot On Pitney Bowes
1: Discounted P/E
Pitney Bowes is trading at a significant discount to historical P/E ratios. While it traded at a near 20 P/E as recently as 2011, the P/E today is a dirt cheap 4.2.
2: Strong Dividend
Pitney Bowes is a Dividend Aristocrat, meaning it has increased dividend payouts for 25 consecutive years. At current prices, the stock is yielding a phenomenal 10.52% dividend yield. This provides investors with a lot of upside through a DRIP (Dividend Reinvestment Plan).
3: Downside Priced In
Analyst price targets on PBI range from $16 to $20, with a mean of $17.80. This represents a significant (25%) mean upside. With the fat dividend yield, the upside is phenomenal.
4: High Net Margin
PBI has a net margin of 12.6% over the four trailing quarters. This is the highest margin in its peer group (the Office Equipment Industry).
While Pitney Bowes was classically involved in the production of postage meters and related products, they are quickly becoming a new tech giant, offering comprehensive communications solutions with digital software-as-a-service [SAS] offerings.
6: Poised for a Breakout When Recovery Kicks Off
Small business creation has been lagging lately, but in the long term, it will come back. Pitney Bowes is well positioned for this:
Analyst Shannon Cross, founder of Cross Research, said Pitney Bowes' major problem is the economy, noting that a big part of Pitney Bowes business is centered on small business creation, which has been lacking. 'They're managing as best they can,' she said.
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Disclosure: I am long (PBI)