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Why McGrath (MGRC) is a Great Dividend Stock Right Now
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
McGrath in Focus
Headquartered in Livermore, McGrath (MGRC - Free Report) is a Finance stock that has seen a price change of 2.43% so far this year. The business-to-business rental company is paying out a dividend of $0.46 per share at the moment, with a dividend yield of 2.21% compared to the Financial - Leasing Companies industry's yield of 1.11% and the S&P 500's yield of 1.55%.
In terms of dividend growth, the company's current annualized dividend of $1.82 is up 5.5% from last year. McGrath has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 12.68%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, McGrath's payout ratio is 47%, which means it paid out 47% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MGRC expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $4.06 per share, which represents a year-over-year growth rate of 10.93%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that MGRC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why McGrath (MGRC) is a Great Dividend Stock Right Now
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
McGrath in Focus
Headquartered in Livermore, McGrath (MGRC - Free Report) is a Finance stock that has seen a price change of 2.43% so far this year. The business-to-business rental company is paying out a dividend of $0.46 per share at the moment, with a dividend yield of 2.21% compared to the Financial - Leasing Companies industry's yield of 1.11% and the S&P 500's yield of 1.55%.
In terms of dividend growth, the company's current annualized dividend of $1.82 is up 5.5% from last year. McGrath has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 12.68%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, McGrath's payout ratio is 47%, which means it paid out 47% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MGRC expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $4.06 per share, which represents a year-over-year growth rate of 10.93%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that MGRC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).