Market Overview

3 Reasons to Invest like a Sniper in Park National

Related PRK
Park National Corporation Announces David L. Trautman Will Become Chief Executive Officer in 2014
UPDATE: Stifel Nicolaus Initiates Hold on Park National Corporation

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.

Related: 3 Reasons To Buy JetBlue On The Decline

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.

Posted-In: Long Ideas News Dividends Dividends Small Cap Analysis Technicals Trading Ideas Best of Benzinga

 

Most Popular

Related Articles (PRK + JPM)

Around the Web, We're Loving...

Partner Network

Get Benzinga's News Delivered Free