Insight into McGrath RentCorp's Upcoming Dividend and Historical Performance
McGrath RentCorp (MGRC, Financial) recently announced a dividend of $0.47 per share, payable on 2024-01-31, with the ex-dividend date set for 2024-01-16. 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?
McGrath RentCorp is a diversified business-to-business rental company, operating across four primary segments: Modular building and portable storage (Mobile Modular), Electronic test equipment (TRS-RenTelco), Containment solutions for hazardous and non-hazardous liquids and solids (Adler Tanks), and Classroom manufacturing (Enviroplex). McGrath RentCorp generates the majority of its revenue from the rental of its equipment on operating leases, complemented by equipment sales as part of its business operations.
A Glimpse at McGrath RentCorp's Dividend History
McGrath RentCorp has upheld a consistent dividend payment track record since 1990, distributing dividends on a quarterly basis. The company has achieved the status of a dividend aristocrat, a prestigious title reserved for companies with at least 25 consecutive years of dividend increases. McGrath RentCorp's commitment to growing its dividends annually since 1990 underscores its financial stability and dedication to shareholder returns.
Below is a chart showing annual Dividends Per Share for McGrath RentCorp, illustrating historical trends.
Breaking Down McGrath RentCorp's Dividend Yield and Growth
McGrath RentCorp currently boasts a 12-month trailing dividend yield of 1.66% and a forward dividend yield of 1.66%, indicating market expectations of steady dividend payouts in the coming year. Over the past three years, the company's annual dividend growth rate was 7.10%. This growth rate accelerates to 11.40% when looking at a five-year span. Over the past decade, McGrath RentCorp has maintained a solid annual dividend growth rate of 7.70%.
Considering McGrath RentCorp's dividend yield and five-year growth rate, the 5-year yield on cost for McGrath RentCorp stock is approximately 2.85% as of today.
The Sustainability Question: Payout Ratio and Profitability
Evaluating McGrath RentCorp's dividend sustainability involves examining the dividend payout ratio, which stands at 0.36 as of 2023-09-30. This ratio suggests that McGrath RentCorp retains a substantial portion of its earnings, providing a buffer for future growth and resilience against economic downturns. The company's profitability rank is an impressive 9 out of 10, indicating strong earnings potential compared to its peers. McGrath RentCorp's consistent positive net income over the past decade further reinforces its robust financial health.
Growth Metrics: The Future Outlook
McGrath RentCorp's growth rank of 9 out of 10 signals a promising growth trajectory. The company's revenue per share and 3-year revenue growth rate of 8.90% per year outperform approximately 62.07% of global competitors. McGrath RentCorp's 3-year EPS growth rate of 6.30% per year also surpasses about 41.4% of global competitors. However, the 5-year EBITDA growth rate of -3.00% suggests there are areas where McGrath RentCorp lags behind some industry peers.
Engaging Conclusion
In conclusion, McGrath RentCorp's consistent dividend payments, admirable growth in dividend rates, prudent payout ratio, and strong profitability metrics paint a picture of a company committed to shareholder value. While the growth metrics offer a mixed view, the overall financial health of McGrath RentCorp suggests that the dividends are well-supported. Investors should consider these factors when evaluating the attractiveness of McGrath RentCorp as a potential addition to their dividend portfolios. Will McGrath RentCorp continue to be a reliable source of dividends for years to come?
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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.
