Yahoo Finance McGrath RentCorp's Dividend Analysis
Assessing McGrath RentCorp's Upcoming Dividend and Financial Health
McGrath RentCorp (NASDAQ:MGRC) recently announced a dividend of $0.48 per share, payable on 2024-04-30, with the ex-dividend date set for 2024-04-15. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into McGrath RentCorp's dividend performance and assess its sustainability.
What Does McGrath RentCorp Do?
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McGrath RentCorp is a diversified business-to-business rental company, operating across various segments. Its Mobile Modular division provides modular buildings and portable storage, TRS-RenTelco offers electronic test equipment, Adler Tanks specializes in containment solutions for hazardous and non-hazardous liquids and solids, and Enviroplex is engaged in manufacturing modular classrooms in California. McGrath RentCorp's revenue primarily stems from the rental of its equipment on operating leases, alongside equipment sales as part of its regular business operations.
A Glimpse at McGrath RentCorp's Dividend History
McGrath RentCorp has upheld a steadfast commitment to dividend payments since 1990, distributing dividends quarterly to its shareholders. The company has not only consistently paid dividends but has also increased its dividend annually, earning it the prestigious title of a dividend aristocrata recognition awarded to companies with at least 34 consecutive years of dividend increases. To visualize McGrath RentCorp's commitment to growing shareholder value, here is a chart depicting the annual Dividends Per Share and its historical trends.
Breaking Down McGrath RentCorp's Dividend Yield and Growth
As of today, McGrath RentCorp's 12-month trailing dividend yield stands at 1.62%, with a forward dividend yield of 1.65%, indicating an anticipated increase in dividend payments over the next year. Over the past three years, the annual dividend growth rate was 4.20%. This growth extends to a 7.40% annual increase over a five-year span, and an impressive 8.20% over the past decade. Consequently, McGrath RentCorp's 5-year yield on cost is approximately 2.31% as of today.
The Sustainability Question: Payout Ratio and Profitability
When evaluating the sustainability of McGrath RentCorp's dividend, it's crucial to consider the dividend payout ratio. This ratio, currently at 0.41 as of 2023-12-31, indicates the proportion of earnings paid out as dividends. A lower ratio suggests a healthy balance between distributing earnings to shareholders and retaining funds for growth and financial stability. Complementing this, McGrath RentCorp's profitability rank is a robust 9 out of 10, reflecting strong earnings potential and consistent positive net income over the past decade.
Growth Metrics: The Future Outlook
McGrath RentCorp's growth rank of 9 out of 10 signals a positive growth trajectory relative to its competitors. The company's revenue per share and a 13.30% average annual 3-year revenue growth rate outperform 69.11% of global competitors. Additionally, McGrath RentCorp's 3.10% average annual 3-year EPS growth rate and a 5-year EBITDA growth rate of 5.00% are competitive, outperforming 32.96% and 37.48% of global competitors, respectively.
Next Steps
Considering McGrath RentCorp's consistent dividend payments, growth in dividend rates, prudent payout ratio, strong profitability, and robust growth metrics, the company presents a compelling case for investors seeking stable dividend income with potential for growth. As McGrath RentCorp prepares to distribute its upcoming dividend, value investors should evaluate these factors in the context of their investment strategy. For those looking to expand their portfolio with high-dividend yield stocks, the High Dividend Yield Screener available to GuruFocus Premium users is an excellent resource.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
