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This is Why McGrath (MGRC) is a Great Dividend Stock
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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 2.98% since the start of the year. Currently paying a dividend of $0.44 per share, the company has a dividend yield of 2.11%. In comparison, the Financial - Leasing Companies industry's yield is 1.05%, while the S&P 500's yield is 1.46%.
In terms of dividend growth, the company's current annualized dividend of $1.74 is up 0.9% from last year. Over the last 5 years, McGrath has increased its dividend 5 times on a year-over-year basis for an average annual increase of 12.68%. Future dividend growth will depend on earnings growth as well as 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 48%, which means it paid out 48% of its trailing 12-month EPS as dividend.
MGRC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.97 per share, with earnings expected to increase 8.47% from the year ago period.
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. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious 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 also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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This is Why McGrath (MGRC) is a Great Dividend Stock
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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 2.98% since the start of the year. Currently paying a dividend of $0.44 per share, the company has a dividend yield of 2.11%. In comparison, the Financial - Leasing Companies industry's yield is 1.05%, while the S&P 500's yield is 1.46%.
In terms of dividend growth, the company's current annualized dividend of $1.74 is up 0.9% from last year. Over the last 5 years, McGrath has increased its dividend 5 times on a year-over-year basis for an average annual increase of 12.68%. Future dividend growth will depend on earnings growth as well as 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 48%, which means it paid out 48% of its trailing 12-month EPS as dividend.
MGRC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.97 per share, with earnings expected to increase 8.47% from the year ago period.
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. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious 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 also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).