Updated 3/13/25
Pool Corporation might not be the first name that comes to mind when you think about strong dividend stocks, but it probably should be. This Louisiana-based company is the world’s largest distributor of swimming pool supplies, equipment, and outdoor living products. From pool pumps and filters to chemicals and patio furnishings, POOL quietly dominates a niche that continues to grow.
Having been around since the early ‘90s, the company has built a steady, reliable business that supports homeowners, contractors, and commercial clients alike. While it doesn’t generate headlines like tech giants or meme stocks, PoolCorp has built a strong reputation among long-term investors—especially those who appreciate rising dividends and a resilient business model.
Let’s dig in and see how it stacks up from a dividend investor’s perspective.
Key Dividend Metrics
🟢 Forward Dividend Yield: 1.50%
💵 Annual Dividend (Forward): $4.80 per share
🔁 5-Year Dividend Growth Rate: Around 20%
🔒 Payout Ratio: 41.59%
📈 Consecutive Years of Dividend Growth: 13
📅 Upcoming Ex-Dividend Date: March 12, 2025
💳 Next Dividend Payment: March 26, 2025
📉 5-Year Average Dividend Yield: 0.96%
Recent Events
The past year hasn’t been a smooth ride for PoolCorp. Revenue has dipped slightly—down about 1.6% year over year—and earnings have taken a sharper fall at nearly 28%. But before getting too concerned, it’s important to keep the bigger picture in mind.
Over the last few years, PoolCorp saw a massive boost in demand as homeowners invested in their outdoor spaces during the pandemic. That level of demand was never going to last forever. What we’re seeing now is more of a normalization than a red flag. And despite softer earnings, the company still posted operating cash flow over $650 million and more than $500 million in free cash flow. That’s real strength under the hood.
Meanwhile, the stock has pulled back by over 21% in the last year. For income-focused investors, this dip could actually make PoolCorp more attractive—especially with the dividend yield now sitting noticeably above its five-year average.
Dividend Overview
PoolCorp’s dividend yield may not look high at 1.50%, but this company isn’t about chasing big short-term payouts. It’s about delivering consistent, growing income over time. And that’s exactly what they’ve done.
With 13 straight years of dividend growth, PoolCorp has quietly become a dependable income generator. More impressively, the growth rate has been anything but modest. Over the last five years, the dividend has roughly tripled. This kind of payout consistency—and acceleration—is exactly what long-term dividend investors look for.
Even with the recent earnings dip, the company’s payout ratio remains very manageable at just over 40%. That gives plenty of breathing room to continue growing the dividend without compromising financial health or needing to take on more debt.
Dividend Growth and Safety
Here’s where PoolCorp really stands out. Since 2019, the company has taken its annual dividend from $1.52 per share to $4.80 today. That’s not a gradual increase—it’s an aggressive one, fueled by strong cash flow, disciplined reinvestment, and a leadership team that clearly prioritizes shareholder returns.
From a safety standpoint, the numbers tell the story. PoolCorp is still generating strong returns on assets (11.3%) and an even stronger return on equity (33.6%). That kind of efficiency is exactly what dividend investors want to see—it means management knows how to put capital to work and keep shareholders in mind while doing it.
Even with slowing sales and earnings this past quarter, there’s no immediate concern for the dividend. With consistent cash generation and a reasonable payout ratio, PoolCorp has room to maintain—and continue growing—its distribution.
Chart Analysis
General Structure and Wyckoff Stage Assessment
Looking at Pool Corporation’s chart, what stands out is how the stock has gradually transitioned from a steep markdown phase into what now looks like a prolonged period of reaccumulation. That sharp drop between April and July reflects a classic markdown—persistent lower highs, lower lows, and an unmistakable break beneath the 50-day and 200-day moving averages.
Then, mid-July into August, we see what resembles a selling climax. There’s a clear volume spike, heavy selling, and then a sharp bounce off the lows. That move forms the potential spring or test, setting the stage for accumulation to begin.
From late August through early November, price consolidates into a more horizontal structure, trading just beneath the 200-day average and forming a range. That period shows price attempting to reclaim higher ground, which matches Wyckoff’s Phase B of accumulation—where institutions are slowly absorbing supply.
The range between November and March shows choppiness but with less pronounced down moves. This action suggests a slow shift in control, potentially into early markup. Still, the failure to hold above the 200-day moving average in recent sessions hints that Phase D of accumulation may not be fully confirmed yet.
Moving Averages Behavior
The 50-day moving average crossed below the 200-day back in May, a death cross, which set the tone for the long markdown through the summer. The 50-day has tried to slope upwards lately but hasn’t convincingly crossed above the 200-day just yet. That makes this a very telling area. Until that crossover happens, the stock remains technically fragile.
However, the flatlining of the 200-day and the current positioning of the price just below it suggests the downtrend is softening. If the 50-day can curl up and hold, that would reinforce the early signs of markup.
Volume Context
Volume around July spiked dramatically, marking panic selling. Since then, volume has gradually stabilized but shows occasional bursts—especially during upside tests. That’s a classic footprint of accumulation: heavier buying volume during rally attempts and lighter volume on pullbacks. That said, the most recent bars show a tick-up in volume during a down move, which may indicate some supply returning to the market short-term.
The inability to break past previous highs around 375 with conviction shows that there’s still supply in the system being tested. We’ll need to see follow-through on the next bounce to confirm true strength.
RSI and Momentum
The RSI shows a gradual rise out of oversold conditions through July into October, then stabilizes near the 50 line. This tells us momentum isn’t strongly bullish but is no longer deeply bearish either.
More recently, RSI has faded again, slipping under 50, suggesting buying enthusiasm is waning for now. It’s not oversold, which means there may still be room for the downside to play out in the short term if buyers don’t step back in soon.
Candlestick and Wick Activity
Looking at the last five candles:
- The most recent candle has a long lower wick, which hints at buyers stepping in intraday after early weakness, but it closed red—showing that sellers still had the upper hand by the close.
- The previous candle was an inside day, indicating indecision after a recent pop higher. That kind of pattern often resolves with a directional break.
- The third candle had a wide range and closed near its low, paired with higher volume—clear selling pressure that overwhelmed recent buyers.
- The fourth and fifth candles both tried to push higher but failed to hold gains by the close, leaving upper wicks that point to supply still present overhead.
Together, the wick activity leans toward selling pressure still outweighing demand. Buyers are probing, but they’re not sticking around yet.
This area around 330–335 looks like a battleground. Whether POOL can hold this level or breaks down further will say a lot about whether the reaccumulation process is ready to move to the next phase.
Analyst Ratings
📈 Several analysts have recently adjusted their outlook on Pool Corporation (POOL), reflecting shifts in the company’s performance and broader market dynamics.
📊 In October 2024, BofA Securities nudged its price target for POOL up to $318 from $310. The move was based on steady revenue generation and signs of disciplined cost control within the company, despite some sector-wide softness.
🔄 In February 2025, Stephens lowered its target slightly from $415 to $400. While still optimistic, the adjustment reflected a more tempered outlook given lingering macro uncertainty and potentially slower consumer spending on discretionary outdoor upgrades.
📉 Around the same time, Loop Capital revised its price target down to $375 from $395. Analysts there pointed to expected fluctuations in the housing market and their potential to weigh on demand for pool-related equipment and products.
📍 As of late March 2025, the overall analyst consensus puts the average price target for Pool Corporation at approximately $366.50. That target suggests modest upside from current levels, with the view that POOL’s strong industry position and history of shareholder returns help offset short-term volatility.
💡 These updates show that while sentiment remains generally constructive, analysts are watching economic conditions closely. Market pressures tied to interest rates, home construction trends, and consumer discretionary spending are all playing a role in how analysts are recalibrating their expectations.
Earning Report Summary
Pool Corporation’s most recent earnings report reflected a bit of a mixed bag. Net sales came in at $987.5 million for the fourth quarter, slipping about 2% from the same period a year ago. Not a huge surprise, considering the quarter is typically their slowest of the year. With pool construction slowing and people spending less on big-ticket backyard upgrades, it was clear that demand had cooled a bit.
Gross profit dipped slightly to $290.2 million from $293.8 million last year. But despite the revenue drop, the gross margin actually edged up a bit—29.4% versus 29.3%. It’s a small bump, but it suggests the company held its pricing strategy and managed costs pretty well in the face of slower sales.
Operating expenses, on the other hand, were up 7%, hitting $229.6 million. As a percentage of revenue, those expenses moved higher too—from 21.4% last year to 23.3% this time around. That put a bit of pressure on profits. Some of the increase likely came from inflation or investments the company is making to position for long-term growth.
Operating income took a bigger hit, dropping 24% to $60.7 million. That led to a noticeable dip in operating margin too, which isn’t ideal but not entirely unexpected given the mix of softer revenue and higher costs.
One positive note: interest and other non-operating expenses actually fell by about $1.7 million. That’s thanks to lower average debt during the quarter, which helped keep some weight off the bottom line.
There was also a small tax benefit from a standard accounting adjustment—just enough to add a penny per share. Last year’s adjustment added two cents, so not a major shift, but worth mentioning.
Net income came in at $37.3 million for the quarter, down from $51.4 million a year ago. That’s a 27% drop. Earnings per share landed at $0.98, compared to $1.32 last year—a 26% decline. Without that minor tax adjustment, EPS would have been $0.97.
All in, PoolCorp had a softer quarter, mostly due to slower discretionary spending and some cost increases. Still, they held margins reasonably well and continued tightening up their balance sheet. It’s the kind of report that shows some short-term pressure but also a company staying fairly disciplined through a quieter stretch.
Financial Health and Stability
PoolCorp’s financials offer a reassuring blend of strength and flexibility. With over $77 million in cash on hand and a current ratio of 2.05, the company has a comfortable liquidity position.
Total debt sits at around $1.27 billion, and while that may sound hefty at first glance, it’s important to look at the full picture. The debt-to-equity ratio is right around 100%, which isn’t low, but it’s manageable—especially considering the stability of the underlying business and the healthy margins POOL continues to produce.
Profit margins remain respectable, with an 8.2% net margin and operating margins above 6%. These are solid figures for a distribution-focused company. They suggest pricing power, cost control, and consistent end-user demand—even when the broader economy feels uncertain.
Valuation and Stock Performance
Right now, POOL trades at a forward price-to-earnings ratio of about 27.6. That’s not cheap, but it’s also not out of line for a company with a strong moat, reliable growth, and industry leadership. Investors have historically been willing to pay a premium for the consistency PoolCorp delivers.
What’s interesting is that the recent pullback in stock price has made valuation more reasonable. Shares are well off their highs, currently trading around $325, down from over $418 not long ago. The dividend yield has crept higher as a result, giving investors a rare opportunity to lock in a higher income stream from a company that doesn’t often go on sale.
Metrics like price-to-sales (2.3x) and EV/EBITDA (around 20x) confirm that while POOL isn’t cheap in traditional terms, it’s priced more fairly than it has been in recent years. For investors who prize quality over deep discounts, this might be the kind of setup worth watching.
Risks and Considerations
As strong as the fundamentals are, there are still risks worth considering. PoolCorp is tightly linked to housing and construction activity. When homebuilding slows or renovation spending drops—especially in a high-interest rate environment—it can impact demand for pool and outdoor living products.
Also worth noting: valuation risk. Despite the recent drop, the company still trades at a higher multiple than many of its peers. If growth slows more than expected, there’s always the chance that investors could re-rate the stock lower.
Short interest has also climbed, with about 9.5% of the float currently sold short. That suggests some in the market are betting against the stock—likely because of short-term concerns about slowing demand and elevated valuations.
Lastly, PoolCorp’s business is seasonal. Most sales and earnings come in the warmer months, meaning the company can have lumpy results quarter to quarter.
Final Thoughts
PoolCorp may not be a household name, but it’s a company that continues to deliver for shareholders—quietly and consistently. For dividend investors, that consistency is gold. You’re not getting the highest yield on the market, but what you are getting is a well-run business with strong cash flow, a long track record of dividend growth, and the balance sheet to keep it going.
With the recent dip in share price, investors are now getting a slightly better yield than usual and a fairer entry point into a high-quality operator. If you’re building a dividend-focused portfolio and prefer steady growers over flashy high-yielders, PoolCorp might be one to keep on the radar. It’s not just about pools—it’s about cash flow, discipline, and shareholder value.