Growth and income are not mutually exclusive.Healthcare
Services Group (
) is a prime example.
The Bensalem, Pa.-based firm provides laundry, housekeeping,
food and maintenance services to hospitals and senior-living
According to the Administration On Aging, the number of people
age 65 or older is expected to grow to 72.1 million by 2030, up
from 39.6 million in 2009. This bodes well for the company.
Healthcare Services Group has delivered double-digit earnings
and sales gains in most years since 2000. It has a five-year
Earnings Stability Factor of 5, indicating a steady stream of
The firm has grown organically and through buyouts. Last
month, the company agreed to buy nearly all of the operating
assets of privately held rival Platinum Health Services for cash
Analysts polled by Thomson Reuters see profit rising 26% to 82
cents a share this year. Earnings are expected to grow 13% to 93
cents a share in 2014.
Aside from growing its bottom line, Healthcare Services Group
has rewarded shareholders with cash dividends since 2003. Unlike
many companies that only raise their dividend once every few
years, Healthcare Services Group has lifted its payout for 40
straight quarters, albeit in small increments, since it first
started paying dividends.
The firm currently pays 16.88 cents every quarter or about
67.5 cents a year. It has a yield of about 2.7%, which is larger
than that of the S&P 500.
Healthcare Services Group has formed a cup-with-handle base
with a 26.02 buy point. The stock reset its base count in late
April after breaching the low of a prior base, making the current
pattern a first-stage structure.