Healthcare Services Lifts Dividend Quarter After Quarter


For some companies, it might take years before shareholders see bigger dividend checks. But that's not the case for stockholders ofHealthcare Services Group ( HCSG ).

The company has raised its dividend every quarter since it started paying quarterly dividends in 2003.

In late January, Healthcare Services Group bumped up its quarterly dividend to 16.625 cents a share from 16.5 cents. That marked its 38th consecutive dividend hike.

At the new quarterly rate, the company pays 66.5 cents a share on an annual basis. Healthcare Services Group has a yield of about 2.8%, which is slightly higher than that of the S&P 500.

Healthcare Services Group has the highest yield among the two dividend-paying stocks in the laggard Commercial Services -- Healthcare group. In Monday's IBD, the group ranked 156 out of 197 groups.

The Bensalem, Pa.-based company provides housekeeping, laundry, maintenance services and nutritional services. It serves long-term care facilities and hospitals in 47 states.

Healthcare Services isn't in the most exciting line of work, but it has delivered steady top- and bottom-line growth in most recent years. During tough times in 2008, earnings fell 10%, but sales rose 4%.

Last month, Healthcare Services beat expectations with Q4 earnings that jumped 19% to 19 cents a share. That was its biggest gain in eight quarters. Its sales grew 11% to $277 million, but slightly missed views.

The company wrapped up 2012 with a 16% increase in profit and a 21% rise in revenue. Both were the best in years.

Analysts polled by Thomson Reuters see its 2013 earnings rising 25% to 81 cents a share. The estimate has been raised recently.

The stock is somewhat thin, trading 340,000 shares daily.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: HCSG

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