Is the Premier Investments share price a buy today?

The Premier Investments Limited (ASX: PMV) share price is up over 11% for the year so far. Is it a buy today?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Premier Investments Limited (ASX: PMV) share price has had a solid 2019 so far, banking an 11.7% return since January (not including dividends). Although this is good news for PMV shareholders, the stock is still a ways off its 52-week high of $20.16, which it hit in September last year. So is Premier Investments a buy today?

What does Premier Investments d0?

You may not have heard of Premier Investments, but it is highly likely you have heard of at least some of its brands. The company owns the Just Jeans chain, as well as Jay Jays, Smiggle, Peter Alexander and Dotti – making Premier Investments a big player in the Australian retail space. The company also has a 28% stake in appliance maker Breville Group Ltd (ASX: BRG).

Premier Investment's chairman is Solomon Lew, a highly regarded businessman and a famous investor in his own right.

The company has done a remarkable job of positioning itself for the digital age. Its Smiggle and Peter Alexander stores in particular have carved out a niche brand for themselves and remain highly popular with their respective target markets.

Smiggle has been a stand-out performer, with global sales increasing 58% over the past two years (to 2018), and 67% of its sales coming from outside Australia. Peter Alexander has also proved a highly successful brand for Premier, with sales also up 32% for the two-year period.

Is Premier Investments a buy?

Looking in, there is a lot to like about Premier Investments. In my opinion, the company has done what many have failed to do – establish a strong and sustainable presence in the retail space, with a robust online storefront to boot. Although many retailers are feeling the Amazon-effect, I feel Premier is well positioned to protect its brands and niches well into the future. Its stake in Breville has also proved a winner, with Breville shares up 123% over the past five years (not including dividends).

It's worth noting that Premier shares are trading for a slight premium in the market at current prices. At the time of writing, PMV shares are swapping hands for $16.12, which gives them a price-to-earnings ratio of 30.6, which is high by comparison to the market. In saying this, PMV is currently paying a dividend yield of 4.1% on current prices, which makes PMV a good income stock at current times.

Foolish takeaway

I think Premier Investments is a quality company and one of the best retail picks if you are looking for some exposure to that space. Saying this, the current price is a little pricey for me personally at the present time, but its dividend yield is at an attractive level for income investing.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Retail Shares

Two happy woman looking at a tablet.
Retail Shares

2 ASX retail shares that look like Black Friday bargain buys

These stocks look like appealing opportunities.

Read more »

A woman wearing jewellery shrugs
Retail Shares

Lovisa share price slides as sales growth fails to impress

ASX 200 investors are bidding down Lovisa shares on Friday. But why?

Read more »

Man with diving gear on in a bathtub.
Retail Shares

Own Wesfarmers shares? Here's why Bunnings is in hot water this week

Wesfarmers is getting some unwanted attention from its Bunnings operations.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Retail Shares

Up 90%, this ASX 200 retail stock's CEO just sold $500,000 worth

What could this mean?

Read more »

View of a mine site.
Retail Shares

Why buying Wesfarmers shares could provide unique lithium exposure

In the last 12 months, the stock has rallied more than 28%.

Read more »

Photo of two women shopping.
Retail Shares

Why one leading fund manager thinks this fallen ASX All Ords stock is a turnaround buy

This is a bargain stock, according to a leading fundie.

Read more »

a woman wearing fashionable clothes and jewellery checks her phone with a satisfied smile on her face in a luxurous home setting.
Retail Shares

Guess which ASX 200 stock just extended its $580 million buyback

Could this draw investor attention to the stock?

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Retail Shares

Own Wesfarmers shares? Here's why Bunnings' monster profits are raising eyebrows

Bunnings is the jewel in Wesfarmers’ crown. Some people are questioning whether it should sparkle as much as it does.

Read more »