Healthcare Services Group, Inc. Reports Earnings, Hikes Dividend Income Investors 2016-07-14 11:47:32 Healthcare Services GroupNASDAQ:HCSGHCSG stockHCSG dividend Healthcare Services Group, Inc. (NASDAQ:HCSG) reports second-quarter results and hikes dividend. Dividend Stocks https://www.incomeinvestors.com/wp-content/uploads/2016/07/Healthcare-Services-Group-150x150.jpg

Healthcare Services Group, Inc. Reports Earnings, Hikes Dividend

Housekeeping may not be the sexiest business in the world, but it has been a profitable formula for investors.

On Tuesday, Healthcare Services Group, Inc. (NASDAQ:HCSG) stock announced a quarterly dividend of $0.18375 per common share, representing a 0.7% increase from its existing payout. Tuesday’s announcement marks the 52nd consecutive increase since the company started paying quarterly dividends in 2003. (Source: “Healthcare Services Group, Inc. Reports Results for the Three and Six Months Ended June 30, 2016 & Increases Second Quarter 2016 Cash Dividend,” Healthcare Services Group, Inc., July 12, 2016.)

The dividend hike is the latest sign of strength for the national provider of housekeeping, laundry, and dietary services to healthcare facilities. The company also reported quarterly results on Tuesday, which showed that revenue increased nine percent year-over-year to $386.6 million. Net income came in at $18.8 million, or $0.26 per diluted share. The earnings-per-share (EPS) figure represented a 13% increase year-over-year.

Analysts have been generally upbeat about the company. In a research note published Wednesday, Jefferies Group analyst Sean Dodge raised his price target on HCSG stock from $36.00 to $41.00. He noted that Healthcare Services Group reported $70.0 million in new business back in the fourth quarter of 2015 and the new business was expected to be implemented in the first quarter of 2016. (Source: “Jefferies Raises Price Target on Healthcare Services Group to $41 Following 2Q,” Street Insider, July 13, 2016.)

“The good news is, as of June (per management), all is back on track and performing as expected. Further, the company expects sales and implementation activity during 2H16 will be sufficient to drive full year revenue growth into the (low) double-digits,” Dodge said. (Source: Ibid.)

If Healthcare Services Group improves its second-half results in the way Dodge predicts, HCSG stock’s streak of dividend increases could continue.

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