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Why McGrath (MGRC) is a Great Dividend Stock Right Now
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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 -8.35% since the start of the year. The business-to-business rental company is paying out a dividend of $0.47 per share at the moment, with a dividend yield of 2.06% compared to the Financial - Leasing Companies industry's yield of 2.03% and the S&P 500's yield of 1.81%.
Looking at dividend growth, the company's current annualized dividend of $1.86 is up 3.3% 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 7.29%. 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. McGrath's current payout ratio is 38%. This means it paid out 38% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MGRC for this fiscal year. The Zacks Consensus Estimate for 2023 is $4.72 per share, which represents a year-over-year growth rate of 0.43%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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 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 is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Why McGrath (MGRC) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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 -8.35% since the start of the year. The business-to-business rental company is paying out a dividend of $0.47 per share at the moment, with a dividend yield of 2.06% compared to the Financial - Leasing Companies industry's yield of 2.03% and the S&P 500's yield of 1.81%.
Looking at dividend growth, the company's current annualized dividend of $1.86 is up 3.3% 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 7.29%. 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. McGrath's current payout ratio is 38%. This means it paid out 38% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MGRC for this fiscal year. The Zacks Consensus Estimate for 2023 is $4.72 per share, which represents a year-over-year growth rate of 0.43%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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 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 is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).