With a market capitalization of under $1Billion and virtually no press and only 2 analysts covering the stock, the yield stands at 4.3%. What's going to continue to power this stock though, is sustained dividend increases in the face of a very harsh environment. They're on a streak here and the management intends on keeping these dividend increases going. While the proverbial "recession-proof"/"defensive" healthcare sector proved to be anything but in the recent downturn, this particular niche actually appears to hold true to the stereotype. In fact, Healthcare Services Group is doing so well, not only is it increasing its dividend every quarter, but it also just announced an acquisition: Contract Environmental Services, one of their competitors. With the well-known graying of America and cost pressures on healthcare providers, the business outlook is quite strong for HCSG.
The company, which sells housekeeping and food services to hospitals and nursing homes, said its profit grew to $7.7 million, or 18 cents per share, from $6.9 million, or 16 cents per share a year earlier. Revenue rose 9 percent to $160.4 million from $147.3 million.
Analysts had expected a profit of 17 cents per share and $158.4 million in revenue, according to Thomson Reuters.
Healthcare Services said its profit from operations grew slightly, to $11.6 million from $10.8 million, while its investment and interest income nearly tripled to $937,000 from $324,000.
The company raised its dividend to 18 cents. Its dividend during the first quarter was 17 cents, and the company paid a dividend of 14 cents a year ago.
The dividend will be payable May 15 to shareholders of record as of April 24.
In aftermarket trading, Healthcare Services stock grew 39 cents, or 2.5 percent, to 16.30, after closing the regular session at $15.91, down 2 cents.
I own shares of HCSG.