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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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
McGrath in Focus
McGrath (MGRC - Free Report) is headquartered in Livermore, and is in the Finance sector. The stock has seen a price change of -7.6% since the start of the year. The business-to-business rental company is currently shelling out a dividend of $0.46 per share, with a dividend yield of 2.45%. This compares to the Financial - Leasing Companies industry's yield of 1.15% and the S&P 500's yield of 1.76%.
In terms of dividend growth, the company's current annualized dividend of $1.82 is up 5.5% from last year. In the past five-year period, McGrath has increased its dividend 5 times on a year-over-year basis 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. McGrath's current payout ratio is 47%, meaning it paid out 47% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MGRC for this fiscal year. The Zacks Consensus Estimate for 2022 is $4.06 per share, representing a year-over-year earnings 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. 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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Are You Looking for a High-Growth Dividend Stock?
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.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
McGrath in Focus
McGrath (MGRC - Free Report) is headquartered in Livermore, and is in the Finance sector. The stock has seen a price change of -7.6% since the start of the year. The business-to-business rental company is currently shelling out a dividend of $0.46 per share, with a dividend yield of 2.45%. This compares to the Financial - Leasing Companies industry's yield of 1.15% and the S&P 500's yield of 1.76%.
In terms of dividend growth, the company's current annualized dividend of $1.82 is up 5.5% from last year. In the past five-year period, McGrath has increased its dividend 5 times on a year-over-year basis 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. McGrath's current payout ratio is 47%, meaning it paid out 47% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MGRC for this fiscal year. The Zacks Consensus Estimate for 2022 is $4.06 per share, representing a year-over-year earnings 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. 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).